Executive Intelligence Review, Volume 19, Number 46, November ...

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Founder and Contributing Editor:
Lyndon H. LaRouche, Jr.
Editor: Nora Hamerman
Managing Editors: John Sigerson, Susan Welsh
Assistant Managing Editor: Ronald Kokinda
Editorial Board: Warren Hamerman, Melvin
Klenetsky, Antony Papert, Gerald Rose, Edward
Spannaus, Nancy Spannaus, Webster Tarpley,
Carol White, Christopher White
Science and Technology: Carol White
Special Services: Richard Freeman
Book Editor: Katherine Notley
Advertising Director: Marsha Freeman
Circulation Manager: Stanley Ezrol
INTELLIGENCE DIRECTORS:
Agriculture: Marcia Merry
Asia: Linda de Hoyos
Counterintelligence: Jeffrey Steinberg,
Paul Goldstein
Economics: Christopher White
European Economics: William Engdahl
Ibero-America: Robyn Quijano, Dennis Small
Law: Edward Spannaus
Medicine: John Grauerholz, M.D.
Russia and Eastern Europe:
Rachel Douglas, Konstantin George
Special Projects: Mark Burdman
United States: Kathleen Klenetsky
INTERNATIONAL BUREAUS:
Bangkok: Pakdee Tanapura, Sophie Tanapura
Bogota: Jose Restrepo
Bonn: George Gregory, Rainer Apel
Copenhagen: Poul Rasmussen
Houston: Harley Schlanger
Lima: Sara Madueiio
Melbourne: Don Veitch
Mexico City: Hugo Lopez Ochoa
Milan: Leonardo Servadio
. New Delhi: Susan Maitra
Paris: Christine Bierre
Rio de Janeiro: Silvia Palacios
Stockholm: Michael Ericson
Washington, D.C.: William Jones
Wiesbaden: G6ran Haglund
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From the Editor
I am pleased to share encouraging news abou� the international
organizing activities of the Schiller Institute, the republican think­
tank founded by Helga Zepp-LaRouche in Germany and the U . S. in
1984, which has since opened activities in many parts of the world.
Helga is the wife of Lyndon LaRouche, the U . S. statesman who
has been imprisoned wrongfully since the week of George Bush's
inauguration in January 1989. As we write, she is ]Visiting Brazil and
meeting with top political leaders , scientists, journalists, and others,
to build a world coalition for freedom. She tells these leaders: "If
President-elect Bill Clinton wants to show that h� is different from
George Bush, he will reverse the greatest travesty of justice of the
Bush administration, the jailing of Lyndon LaRouche."
In the Feature, you will read about the semi�ar with which the
Schiller Institute formally opened activities in Moscow, the focal
point of the greatest potential strategic danger in tpday' s world. In a
seminar which the Russian State Humanitarian University and the
Ukrainian University in Moscow, among others, helped to organize,
LaRouche's plan for physical-economic and related reforms was the
subject of an intense and fruitful two-day debate at the end of Octo­
ber. Henceforth, the superior analysis of the fOI!Iller Soviet Union
which we have offered from a distance over the years (thanks to
LaRouche's method), will be sharpened and enriqhed by the on-theground
organizing and reporting of friends of the LaRouche political
movement there.
At deadline, the news broke that Jordanian Patliamentarian Laith
Shubeilat will be freed by His Majesty King Hussein. This followed
a shocking frameup trial which had ended in conviction for illegal
weapons possession and conspiring to overthrow the state, and a
sentence of 20 years at hard labor, commuted from a death sentence.
The reason for this happy tum of events is to be fO\.lnd in the mobiliza­
tion of the Schiller Institute, which had been worl�ing internationally
to free Shubeilat since September. The affidavit imade available by
Ali Shakarchi, published in this issue, created an i�possible situation
for the military court-such that they had to elimiJilate mention of this
"secret witness," the only source of "evidence"; against Shubeilat.

�TIillContents
Interviews
48 Gianni Cipriani
The co- author of the book
Sovranitii Limitata (Limited
Sovereignty, Mr. Cipriani, one of
the first Italian journalists to
document the new activities of
Freemasonry in the destabilization
of Italy, tells why magistrates have
recently seized lists of 30,000
Masons.
Departments
13 Report from Bonn
It's either depression, or recovery.
51 Andean Report
CAP spurns confidence vote.
59 Music Views and Reviews
Recording catches up with bel
canto.
72 Editorial
Mrs. Thatcher called the tune.
Photo credits: Cover, Jonathan
Tennenbaum. Pages 19, 20, 21,
Rachel Douglas. Page 20, Gil
Riviere-Wekstein . Page 20, 37, 50,
67, Stuart Lewis. Page 36, PIB
Photo No. N- 56223. Page 57,
©Smithsonian Institution.
Reviews
54 'The lamps are going out
all over Europe'
Dreadnought: Britain, Germany,
and the Coming of the Great War,
by Robert K. Massie.
56 Portrait gallery features
exhibit on Hamilton­
Jefferson debate
"The Spirit of Party": Hamilton
and Jefferson at Odds, by Margaret
C.S. Christman.
57 A free black family tells its
story
We Were Always Free: The
Maddens of Culpeper County,
Virginia, A 200-Year Family
History, by Thomas O. Madden, Jr.
with Ann L. Miller.
Economics
4 Trade war and free trade:
two sides of the coin
The V. S. is threatening to impose
punitive tariffs on European
imNrts, supposedly in defense of
free trade. But if you think V.S.
farrriers or consumers will benefit,
think again-and take a look at the
food; cartels that are operating
behind the scenes of the GAIT
negotiations.
6 Which Japan-basher will
Clillton send to Tokyo?
8 Ira, builds 'Third River'
project despite no-fly zone
and embargo
10 Currency Rates
11 Swiss suspicious of
Maastricht Treaty
14 Banking
Mist!lkes in S&L crisis to be
repeated.
15 Agriculture
Minrteapolis hosts free trade meet.
16 Business Briefs

Feature
Street trade at the Moscow subway station.
18 LaRouche's ideas reach
Moscow in time of troubles
Rachel Douglas reports on the
historic Moscow conference on
"Alternative Approaches to
Economic Reform," organized by
the Schiller Institute, the Russian
State Humanitarian University , and
the Ukrainian University in
Moscow.
20 The world economy in
depression
Conference speech by Michael
Liebig , director of EIR
Nachrichtenagentur in Germany .
22 IMF 'cure' is worse than
the disease
Speech by EIR's Konstantin
George.
24 The LaRouche plan for
economic revival
Speech by Jonathan Tennenbaum of
the Fusion Energy Forum.
27 How to overcome errors in
economics
Prof. Taras Muranivsky analyzes
Lyndon LaRouche's textbook, So,
You Wish to Learn All About
Economics? which will soon be
published in a Russian edition.
Professor Muranivsky is rector of
the Ukrainian University in
Moscow .
International
32 Freeing of Jordanian will
set back British gameplan
The trial of parliamentarian Laith
Shubeilat was a sign of a broader
Anglo-American assault against the
Hashemite Kingdom.
Documentation: The affidavit by
Ali Shakarchi, the "secret witness"
who says he was coerced into
giving false testimony against
Shubeilat.
36 In memory: Indira Gandhi,
1917-84
39 Is Kashmir slipping away
from Pakistan?
40 'British Iraqgate' may send
Major, Thatcher, and Bush
to prison
Explosive implications of the
Matrix Churchill affair.
43 Bosnians cry for help to
survive winter
44 Helga Zepp-LaRouche
visits Brazil to forge world
coalition for freedom
46 Colombia adopts Fujimori
tactics in battling narcoterrorism
52 International Intelligence
Volume 19, Number 46, November 20, 1992
National
60 Clinton must take on the
'Casino Mondiale'
Lyndon LaRouche warns the
President-elect: Crack down on the
worldwide "casino" of speculation
and debt that is devouring the world
economy, and reject the fascist
"solutions" of Ross Perot, Warren
Rudman, et al.
62 Clinton means trade war
and mediocrity
Responses to the election from
around the world.
63 ADL and Congress: the
best government drug
money can buy
A chapter from EIR's forthcoming
book exposing the Anti-Defamation
League of B 'nai B'rith, the
American-Israeli Public Affairs
Committee, and other leading
agencies of the Zionist lobby.
Documentation: Illegalities finally
catching up with AlP AC .
66 LaRouche; Bevel vow to
continue campaign, fight
for economic sanity
Rev. James L. Bevel addresses
campaign workers on election
night.
68 Court allows ERISA health
benefits cuts
70 National News

�TIillEconomics
Trade war and free trade:
two sides of the coin:
by Marcia Merry
Since the Bush administration announced on Nov. 5 that the
United States would impose punitive tariffs on European
imports if the European Community (EC) didn't comply in
30 days with U.S. farm trade demands, there has been a
frenzy of official activity to bridge the transatlantic rift­
meetings, letters, accusations, resignations, reinstatements,
and most of all, news releases. But little is really new. In
fact, the outbreak of U . S. -EC trade war is just a riper, uglier
phase of "free trade" policy that has been spreading for .the .
past two decades.
What is kept out of the news are the behind-the-scenes
players in this trade warfare, such as soybean mogul Dwayne
Andreas, Archer Daniels Midland (ADM), andCargill, Inc.,
all of whom have been active in the drive to enforce "free
trade," with or without the trappings of the U.N. General
Agreement on Tariffs and Trade (GAIT), the North Ameri­
can Free Trade Agreement (NAFTA) , and other such
treaties.
What should be uppermost in the minds of the citizens of
the respective nations watching the trade war spectacle, is
that both the free traders and the trade warriors are swindlers.
The real issue is the collapse of national and world tonnage
output of food and other essentials. Instead of either "free"
trade or trade warfare, the world sorely needs emergency
production and food relief policies. First, look at the specifics
of the trade war issues, and then the crisis in world production
and trade.
The issue is looting rights, not soybeans
On Nov. 3, GAIT talks in Chicago broke down between
EC agriculture negotiator Ray MacSharry and U.S. Agricul­
ture Secretary Edward Madigan on resolving differences over
how much the EC will agree to cut farm output and supports
to its 9 million farmers. The U.S. position is that EC farm
supports (such as minimum prices) must be lowered; quotas
4 Economics
!
on European farm output must be lowered, especially for
cereals and oilseeds (rapeseed, soybeans, etc.); and Europe­
an markets must be made wide open to commodities frOm
outside Europe. The two sides!differed on how deeply to cut,
although MacSharry and the �C Commission have already
imposed drastic hardship and fuination on EC farmers.
After the Nov. 3 breakdown in GAIT talks, the United
States announced on Nov. 5 th.t it would impose 200% duties
on $300 million worth of imports from Europe-mainly
white wine, rapeseed oil, and: some other commodities-as
of Dec. 5, unless Europe complied with U.S. demands on
U.S. soybean exports to EuroPe.
The nub of the matter is that about 30 years ago, European
leaders agreed that U. S. soy�an exports would be allowed
into Europe duty-free. This was mainly a concession to the
demands of the grain cartel gi�ts Cargill and ADM. ADM,
whose head Dwayne Andreas .,vas a top Cargill vice president
in the 1950s, is the world's l�est soybean broker and proc­
essor. Cargill executive Robijo Johnson personally attends
the top free trade negotiating $ession of the GAIT Uruguay
Round. And former Cargill vice president Daniel Amstutz
was a top U.S. Department of Agriculture official in the
1980s, and following that, aU. S. GAIT negotiator.
At the time the original! U.S.-EC soybean deal was
struck, Europe was still building up its agricultural productiv­
ity after the devastation from World War II. Since then, under
the EC Common Agriculture Program, European output po­
tential grew strongly until, by �e 1980s, the EC not only had
the potential to be self-sufficient in all categories, including
oilseeds, but had the potential Ito be a leading food exporter.
European food capabilities wQuld be critical for food relief
and for nation-building assista�ce, if the International Mone­
tary Fund (IMF) austerity poli

It is this potential physical and political independence of
continental Europe that current U.S. policy opposes. In
1986, the Uruguay Round of GAIT was initiated by Anglo­
American financial and food cartel interests bent on forcing
through a world treaty arrangement whereby they would have
free trade rights to move into any nation and trample on their
domestic policies, not only in food, but in labor, banking,
medical, and many other areas.
Trade war benefits no farmer or eater
The U. S. demand on soybeans is that the EC must reduce
its oilseed production and guarantee entrance to large
amounts of U.S. soybeans. This is frequently presented as a
matter of fair play and benefit to U.S. farmers. But that's
pure cover story .
ADM and the few other companies dominating soybean
trade systematically underpay U. S. soybean and other farm­
ers, regardless of circumstances. For example, the current
farm price for U.S. soybeans is about $5.30 per bushel. A
fair, or parity price, would be about $12 per bushel. The
cartel forced the government to give up a national parity
policy in the 1950s.
The cartel backs a group called the American Soybean
Association, which voices cartel demands in the name of the
farmer. Members of the group were present at the Chicago
hotel where the Madigan-MacSharry talks took place, and
the cartel-controlled farm group demanded trade war against
Europe.
There are false friends of the farmer on the other side of
the Atlantic as well. Once the U. S. trade warfare threat was
announced, French politician Jacques Delors, who is now
serving as head of the European Commission but has aspira­
tions of succeeding Fram;ois Mitterrand as President of
France, moved to get EC members to vote for counter-retalia­
tion against the United States. A list of which U.S. imports,
for example com gluten, would get slapped with tariffs was
drawn up. Delors's anti-U.S. actions prompted EC negotia­
tor Ray MacSharry to resign as negotiator for a few days,
because he charged Delors was stabbing him in the back.
MacSharry is known as Ray-the-Axe MacSharry for his cuts
against EC farmers.
However, Delors is no friend of the French farmer. He
is just on the hot-seat, and is occasionally forced to pay lip
service to their interests. Because of EC actions undermining
European farmers to date, whole areas of rural France have
become depopulated, as large numbers of farmers have been
dispossessed.
Despite Delors, on Nov. 6, the 12 nations of the European
Community voted down counter-retaliation against the Unit­
ed States by 7-5. Voting with France were Spain, Ireland,
Belgium, and Greece.
Since that time, conciliatory talk has ruled the day. Brit­
ain in particular has moved to align Germany against France,
and against the interests of European farmers. The business
EIR November 20, 1992
sector in Germany, which has so far been unable to initiate
economic development in eastern Germany or eastern Eu­
rope, has fallen for the Anglo-American free trade argument
that it will cost less for food imports t9 come into Germany
and the EC from abroad, than to foster domestic production.
With opportunistic spokesmen for Fr�nce, such as Delors,
no French statesman has been able tb counter the British
pressure on Germany.
On Nov. 11, British Prime Minister John Major and Ger­
man Chancellor Helmut Kohl issued a joint public welcome
to the resumption of EC-U. S. GAIT talks, in a news confer­
ence in Oxford.
U.S. trade officials also issued support for new GAIT
talks on Nov. 11, saying that the parameters of an eventual
agreement would have to reflect "some production level that
makes some sense" in terms of reducing EC farm output, and
"bringing it down to a non-obtrusive level," the Nov. 12
London Financial Times reported in an article entitled "Opti­
mism on Trade as EC, U.S. Agree to Fresh GATT Talks."
In mid-November, EC trade representative Frans An­
driessen and MacSharry are returning to the United States to
try to smooth things over on this and other issues. GAIT
Director Arthur Dunkel has been mandated by the EC Com­
mission to devise some basis for resuming GAIT talks with
the United States.
Whatever happens on Dec. 5 ("Retailation Day"), the
world will still be faced with the task of stamping out all of
these trade control operations-themselves just practices of
the decaying IMF system of private central banks-and in­
stead, restoring production and feeding people as the goals
of national economies and trade.
For the past five years, total global annual output of grains
of all types has been 1.6-1.8 billion tons, which is below
average annual consumption needs. Moreover, much of the
cereals production for export or food nelief has been concen­
trated in the Anglo-American bloc of food-exporting nations
(Canada, the United States, and Australia) and otherwise
controlled by Cargill and the food cartel. These countries
determine where the 200 million tons traded each year goes.
For example, the U.S. com harvest in 1992 will be over
half of all the world's grain output. Cargill, Louis Dreyfus,
Continental, and one or two other companies currently mo­
nopolize all that grain potential, and they are permitting next
to none for food relief purposes.
The same picture holds for all other categories of food­
stuffs and feed. At present, over 53% of all soybean oil
stocks in the world are located in the United States. As of
September, there was a record 1.089 million metric tons
of soybean oil in storage in the United States. Free trade
advocates in cartel and government circles warn that unless
their trade demands are met, there will be the biggest "soy
oil lake" in history next year, with 1.300 million metric tons.
There are other ways of disposing of food stocks than free
trade and trade war.
Economics 5

Which Japan-basher will
Clinton send to Tokyo?
by Kathy Wolfe
University of San Diego professor Chalmers Johnson is a
prime Clinton prospect for ambassador to Japan, and the
other major choice is Johnson's friend Glenn Fukushima, a
former U . S. trade negotiator, National Public Radio reported
on Nov. 5. Johnson, 61, is known in Tokyo as the "godfather
" of Japan-bashers, for his many books and articles attacking
Japan as an authoritarian state (see especially MIT!
and the Japanese Miracle, Stanford University Press, 1982).
Johnson is known in the United States as the mentor
of former U.S. Special Trade negotiator Clyde Prestowitz,
whose 1988 book Trading Places: Giving Our Future to
Japan opened a new round of Japan-bashing. '
Reached for comment, Johnson told EIR that if nominated,
he would serve, although he would prefer that the
younger Fukushima get the job. Johnson would rather go to
Washington, he said, to direct U.S. policy toward Japan
from a seat on President Clinton's new Economic Security
Council, where he could coordinate the U.S. side, with Fukushima
running U . S. operations in Tokyo.
"The cozy relationship with Japan is over, " Johnson told
EIR , after the U.S. election. "We need a radical change in
domestic and foreign economic policy. " Japan should be
slapped with tough trade barriers, and threatened with a U.S.
troop pullout, in his view. "We have to raise our tariffs and slash
our defense spending, especially our foreign defense spending-whatever
it takes," he said. "I think Clinton will tell the
Japanese, 'Open your markets now, or we will begin to close
ours.' I think he will use that aspect of [the North American
Free Trade Agreement] NAFTA. . . . The tariff walls and 70%
domestic content laws are going to go up against Japan and hit
them hard. NAFTA is a response to Japan !
"The Japanese are going to get hit by this ," he predicted.
"Americans will now demand an industrial policy, as Daniel
Yankelovich says in the Fall 1992 Foreign Affairs. " Foreign
Affairs is the quarterly journal of the New York Council on Foreign
Relations. Yankelovich's article, "Foreign Policy after the
Election, " asserts that there is "immense pressure " for protectionism
in the United States now, because Americans believe the
U.S.-Japan alliance is a "nonsensical fantasy " and that Japan is
actually intent upon burying the United States.
"There are demonstrations against Sumitomo building
trolleys in California, " Johnson went on. "There are riots in
Los Angeles against Asians. This means that Japan's lobby
6 Economics
in Washington can't stop hi$tory any more."
Johnson also stated that :however shaky the Maastricht
Treaty may look, Europe, too, will soon "slam the door on
the Japanese. " Maastricht is "not falling apart as far as Japan
is concerned, " he said. "They are going to put those barriers
up, and do it hard. "
Johnson has written Clinton "a very strong memo" outlining
his proposals for getting tough with Tokyo along just
these lines.
'Do we keep the alliance?'
"We need some real radicals in there," Johnson said of
Clinton's new Economic Security Council. Perhaps most
radical is Johnson's demand, that the United States cut off
defense expenditures to Japan and withdraw troops, which
would leave Tokyo facing t..,...o nuclear powers, China and
Russia, alone.
"Should we keep the sam¢ alliance with Japan?" Johnson
asked rhetorically; his answer was: "no." "Americans are
not going to tolerate the curr¢nt situation. Starting with this
election, the U.S. public will no longer tolerate America
borrowing from Japan, going into debt, in order to defend
Japan! That was fine when Japan was weak and we were
loaning them money. Now, why should we spend $40 billion
a year to defend Japan and Germany?
"Japan's game is up! A�ricans now realize that we no
longer have to tolerate Japanese blackmail. While Russia
was around, the Japanese couIp say that they were the world's
biggest strategic port. Everyone in Washington argued that'
policy with Japan was: 'Keep the ally, we need that military
position.' No more! Now the American people will say:
'Fine! Let them throw us out pf the naval base at Yokosuka!
Is that a threat-or a promise� We don't want to pay for it. ' "
Johnson went even further, to argue that it is Japan which
is a growing military threat. i "One does have to recognize
that all restraints on Japanese use of military force are now
being hollowed out, " he said. ,"That's worrying us, and worrying
the Japanese public, too. Japan has the famous nonnuclear
clause in its Constitution, but they have American
aircraft at Yokosuka with nuclear weapons, and now they're
importing plutonium to make nuclear weapons. They say
they are going to use it for pQwer plants. Well, maybe they
are going to use it for power plants , and maybe not! Maybe
EIR November 20, 1992

they will use it for something else! But the point is the principle
is being hollowed out.
"Then there is Japan's so-called 'Peace Constitution'
clause which states that Japan will never export arms or allow
arms to become more than 1 % of GNP. Nonsense, Japan is
exporting arms to the United States and everywhere else. The
Stealth bomber is not the Stealth bomber without TDK's
technology. Look at all the other U.S.-Japan joint military
projects. Who's benefiting from whom?
"And the Japanese Constitution says Japan won't dispatch
troops-but now they are dispatching troops. Soon it
will be more than building a few bridges. "
Of course if one thinks Japan is such a terrible military
threat, it does seem strange to be advocating the U. S. pull its
military out of the Asian theater, but these inconsistencies
do not appear to trouble the professor.
Johnson says he's not calling for a precipitous U.S. pullout
from Asia, in any case, but rather for "an orderly retreat,
a staged withdrawal-but one under which the Japanese are
going to have to begin to pick up their own tab , and soon,
for their own defense. "
Asked how the United States could defend even its own
interests in Asia without troops, the answer comes very close to
talk of nuclear blackmail. "The U.S. is the only nation in the
world with a global capacity to project power, " Johnson says.
"From now on, we will do that, but we will do it from the continental
U.S. We are the only ones in the world who can project
nuclear power, that far. We are going to use that fact.
"Why should the Japanese think we would defend them,
in particular? We should not leave our ships and men on
Japanese soil, so that the Japanese assume we are their ally.
We are going to,stop having our military in Japan as hostage,
so that the Japanese will no longer be able to rely on exactly
what we do with our military. We are going to make all
Japanese decision-making, which was very simple up to
now, very complicated. "
It is likely. that Johnson's rhetoric is in fact only a threat
from these circles, meant to extort more general cooperation
out of Tokyo, and that Clinton's mandate in any case is too
weak to carry out such dramatic strategic shifts. Even if a
threat, it is, however, unprecedented.
Tokyo reactions, Washington realities
While the Clinton team publicly has played down such
foreign policy issues, Japanese Foreign Minister Michio Watanabe
said on Nov. 4 that U.S.-Japan trade friction could
intensify under Clinton. "The Democratic Party has been
supporting trade-protectionism and attempting to put a brake
on the sale of cheaper Japanese goods, " he told constituents
in Tochigi. "It's possible [that Clinton as President] would
reactivate Bill 'Super 301.' "
The U.S. Super 301 legislation imposes tariffs of up
to 100% on shipments to the United States by any country
which does not "open its markets to U.S. goods " to
EIR November 20, 1992
Washington's thorough satisfaction.
Japanese Prime Minister Kiichi Miyazawa himself told
the Diet (Parliament) on Nov . 5, "We hope the new U.S.
administration will take a decisive attitlilde against protectionism.
" Miyazawa has already begun preparing for an early
visit to Washington to meet Clinton, tokyo officials said on
Nov. 4, as soon as possible after his J'lnuary inauguration.
Meanwhile, the process of choosiqg the Tokyo ambassador
seems to be firmly in the hands of circles around Johnson.
Derek Shearer, a student chum of Clinton while the two were
Rhodes Scholars together in Englandi, is "now holding the
Japan portfolio on the transition team, " Johnson told EIR .
He is also a great friend of the professor. "I nominated him
for a Japan Society fellowship in Tokyo a few years ago, "
Johnson said.
"The Japanese are trying to set up a pro-Tokyo dodo bird "
as Clinton's Japan ambassador, Johnson said, "but that's the
last thing we want. " Johnson said that his own choice for
ambassador is the only other name in the running so far,
Fukushima, who was a deputy special trade representative
under Ronald Reagan. Fukushima :Was close during the
Reagan administration with JohnsonFs protege Prestowitz,
who was counselor for Japan affairs to Reagan's Commerce
Secretary Malcolm Baldrige and deputy assistant secretary
of commerce.
Fukushima is a second-generatill Japanese-American
who grew up partly in Tokyo and � completely fluent in
Japanese. Educated at Harvard Law School, he was "eased
out " of the Special Trade Representative's office, Johnson
said, "because he knew too much about Japan, " and was
pushing the Bush administration to confront the Japanese
more on trade issues. He now works at AT&T in Tokyo.
The basic thesis of trade developed by Johnson, Prestowitz,
and, so they claim, Fukushima, during the 1980s,
is that Japan is responsible for the destruction of the U.S.
economy. As Johnson summed up the philosophy, on the
jacket of Prestowitz's book Trading Places: "The failure of
America to comprehend the Japanese economic challenge
. . . is the greatest national scandal since the end of World
War II . . . [which] allowed Japan to destroy many of America's
high-technology industries. "
To succeed, Clinton's Economic Security Council cannot
get anything done within "domestic! policy only " but must
address the fundamental problem in' America, which is not
America, but Japan, Johnson avers. _
"If the Economic Security Coundl wants to accomplish
anything, it will have international a$pects as well," he said.
"Certainly, 'competitiveness' begins at home, but even if we
put everything in the Democratic Party platform into practice
tomorrow, Japan would still be out-investing us 2 to 1, on a
per capita basis. We need a radical change in domestic and
foreign economic policy and you cam't have one without the
other. Sure we need to increase inve$tment here, but we also
have to deal with the foreign threat.'1
Economics 7

Iraq builds 'Third River' project
despite no-fly zone and embargo
by Marcia Merry
November marks the third month of the no-fly zone in southern
Iraq, imposed this summer by the United States, and
sanctioned by the U.N. Security Council, that dictates no
Iraqi planes are permitted to fly south of the 31 st parallel.
The rationalization given by the United States for this
policy of "industrial apartheid " and depopulation, includes
broad accusations against Iraq, involving specific falsehoods
about the hydrology of the region. Efforts to improve southern
Iraq drainage, the U.S. government claims, have been
threatening inhabitants of the marshlands by hurting fisheries
and harming the environment.
The charges against Iraq were detailed in a letter of July
30, from the special rapporteur of the Commission on Human
Rights, addressed to the U.N. secretary general . In this document,
no mention was made of the major hydrological problem
aggravating the Iraqi marshlands, namely that Turkey has been
holding back a large volume of the flow of the Euphrates River,
by operation of the Kayban and Karakaya dams, and the filling
of the huge reservoir behind the new Ataturk Dam.
As the U.S. State Department is in a position to know
very well, the waterworks projects in southern Iraq, running
south from Baghdad, through Basra to the Persian Gulf, have
been thoroughly studied and worked on for over 40 years ,
and are as sound as advanced hydrological engineering science
can make them. (See "Mideast Water Development:
Making the Desert Bloom, " an interview with Dr. Munther
Haddadin, former head of the Jordan River Authority, EIR.
June 19, 1992, pp. 7-12).
Moreover, the history of water projects in the region of
southern Mesopotamia, goes back centuries to ancient times
and the famed "hanging gardens" of Babylon.
In August, Iraq Minister for Foreign Affairs Muhammad
Said AI-Sahhaf, submitted a document to the United Nations
which reviewed the status of these water projects in the southern
Tigris-Euphrates rivers region. The document, addressed
to the secretary general, and intended for the Security Council,
also protested and refuted U.S. charges that Iraq was
violating the rights of people in southern Iraq , whom the
U.S. called "Marsh Arabs. "
8 Economics
Here we present excerpts from the recent Iraqi report.
The map, which schematically shows segments of the Third
River, was done by EIR base4 on maps from the U.S. State
Department, and available in the Library of Congress.
Origin of the Third River project
What is called the Third River project is technically referred
to as the Main Outfall Drain (MOD), designed to move
saline agriculture runoff to sea, and to minimize its pollution
of the Tigris and Euphrates rivers . Also shown on the map
is the route of the Tigris Straight Channel, which was built
to improve river drainage, but was abandoned after the
change in Iraq-Iran borders after 1988. The background of
the Third River is as follows.
"It is widely known that in the Tigris-Euphrates river
basin, cultivation based on irrigation has been practiced for
many centuries owing to the fact that rainfall is insufficient
for agriculture. Because of continuous cultivation and the
high salinity of the water of the Tigris and Euphrates, large
quantities of salts accumulated on agricultural land and transformed
it into land that is for the most part unfit for cultivation,
particularly in the central I and southern areas of Iraq.
"In order to restore the fertility of the soil and transform
these areas into agriculturally productive land, it was necessary
to devise a radical solution to the drainage problem.
What is referred to as the Third River and is known in technical
parlance as the Main Outfall Drain (MOD) project is the
backbone of the solution to thiS problem.
"The idea of the project, which is one oflong standing and
began some 40 years ago, is to. collect high-salinity drainage
water from agricultural enterprises in central and southern
Iraq into one main drain and to channel it into the Arabian
Gulf [Persian Gulf] without intermixture with any of Iraq's
rivers or marshlands.
"The issue of drainage in Iraq was first addressed in the
framework of overall planning in the time of the monarchy
by the American consultancy ,firm Tippet Appet Macarthy
(TAMS) in 1952. In its report to the Development Council,
it proposed that a number of main drains should be used, the
EIR November 20, 1992

most important of them being the Main Drain (Third River)
extending from Balad north of Baghdad to Nasiriyah, to
collect most of the drainage water in the agricultural areas
between the Tigris and Euphrates rivers into one main drain
thence to be channeled into the Arabian Gulf.
"Then, in 1972, the British consultancy firm Sir M. Mac­
Donald & Partners, in a study of the development of irrigation
projects for the central Tigris basin, stressed the need for a
part of the Main Drain (Third River) 154 kilometers long to
be built between Hawr al-Dalmaj [in the north] and Nasiriyah
as a requirement for improved irrigation on the enterprises
in question. . . .
"Between 1972 and 1981, Soviet experts brought in by
the Ministry of Irrigation conducted a number of studies and
produced detailed designs relating to Iraq's overall drainage
plan. A number of options were elaborated for linking the
Main Drain at Nasiriyah with the Arabian Gulf. ...
Where the project stands
"Work on the Main Drain (Third River) has gone through
a number of phases. Two major conduits were built as part
of the expansion of the great Musayyib irrigation project in
1954, and they form the basis for the Main Drain in light of
the planning carried out by the American TAMS company.
Then, in 1959, the 60-kilometer-Iong western Shatrah conduit
was built by the Dutch company Zanen Verstoep NV to
collect drainage water from the Ghiraf region project and
channel it into Hawr aI-Hammar. Subsequently, the 156kilometer-long
central section of the Main Drain was built
between Hawr al-Dalmaj and the western Shatrah conduit by
the Ministry of Irrigation and the Soviets between 1973 and
1977 on the basis of the designs prepared by the British
consultants Sir M. MacDonald & Partners.
"After that, earthworks were completed for the southern
section of the Main Drain between N asiriyah and the Arabian
Gulf by the German company Philip Holzman between 1982
and 1986 on the basis of the designs prepared by the Soviet
consultants previously mentioned.
"Work on the installations and the main pumping stations
was done by the Brazilian company Mendes Junior Co.,
which began work on 22 August 1984 and suspended operations
without completing the work entrusted to it following
the adoption of the embargo resolution in August 1990.
"Work on the project currently under way is confined to
the completion of remaining tasks that were halted owing
to the embargo resolutions and the suspension by foreign
companies of their operations in Iraq. It is to be understood
that most sections of the project were completed, and these
sections are now being linked together with a view to completing
the project.
Significant benefits
"The Main Drain (Third River) project is one of the most
significant, major mUltipurpose agricultural projects in Iraq,
EIR November 20 , 1992
Selected sections of Iraq's
given that it will have a whole set of economic, social and
environmental benefits for the governorates of central and
southern Iraq, namely Salah al-Din, aaghdad, Wasit, Babil,
Dhi Qar, and Basra. I
"The benefits are exemplified bylthe drainage of agricultural
land, the lowering of the groun4water level, the restoration
of fertility to the soil and the enh$cement of productivity
over an estimated area of 6 million Iraqi dunums or 1 ,500,000
hectares. It will also protect the higlb quality of water in the
Tigris and Euphrates rivers and the I marshlands and ensure
its fitness for various municipal, industrial, and agricultural
uses, since the channeling of drainage water into rivers and
water-meadows leads to contamination and salinity.
"The project will also ensure the improvement and development
of fisheries in the southerntmarshland area, which
have deteriorated owing to the high level of salinity in the
marshlands as a result of drainage w�ter being channeled into
them.
"Moreover, the project will be conducive to the stabilization
of sand-dunes in the areas through which the Main Drain
(Third River) runs and will halt the encroachment of desertification
on agricultural enterprises lin central and southern
Iraq. I
"The Main Drain can furthermore be used for purposes
of inland navigation. It is this that has brought about the use
Economics 9

of the name, 'the Third River' for the Main Drain ....
The 'marsh dwellers' argument refuted
"The foregoing attested technical facts show the gross
ignorance and dubious purpose of the special rapporteur's
report as it relates to the Main Drain (Third River) project.
The project does not specifically target the marshlands or
their inhabitants. It is not a new project undertaken with a
view to achieving the objectives stated by the special rapporteur,
which have no basis in the objective reality of the
project.
"The total length of the course taken by the project
from its starting-point to its terminus in the Shatt al­
Basrah Canal is 565 kilometers, while the section of the
marshlands which runs parallel to the river, namely Hawr
aI-Hammar, is only 40 kilometers long. Hence it appears
that the parties behind the special rapporteur's report do
not want the small number of those raising water-buffalo
and living in the marshlands in backward conditions to
develop and become cultivators within a modem framework.
They also do not want Iraq to rid itself of the saline
water that is destroying its soil. They do not want it to
regulate the utilization of its apportionment of water, a
large part of which is being withheld in Turkish and
Syrian territory in violation of international law.
"The parties that planned the report of the special
rapporteur apparently want the Iraqi government to remain
unable to provide for the food needs of its citizens, or a
vital part of them, from inside Iraq, so that those who
have the intention of maintaining the embargo may achieve
their objectives at the expense of the security, stability,
and sovereignty of Iraq.
"Do states or human rights organizations prevent countries
from regulating their water, from building dams, from
draining lakes, or from inundating parts of their territory with
water that belongs to them? "
Turkey withholds Euphrates water
.
"With regard to the question of the paucity of water in
the marshlands, this bears no relation whatever to the project.
It is well known that the marshlands are for the most part fed
by water from the Euphrates River and that the paucity of
the water that has been noted has been caused by the great
reduction of the water in the Euphrates resulting from the
construction and operation of the Kayban and Karakaya dams
in Turkey , the Tabqah Dam in Syria, and the project, begun
in 1990, to fill the reservoir of the very large Ataturk Dam in
Turkey. To prove this objective fact, it suffices to say that
since it began to fill the Ataturk Dam, Turkey has imposed
on both Syria and Iraq a water quota of 500 cubic meters per
second instead of 900. Of this quota, 290 cubic meters per
second are presently reaching Iraq instead of the previous
700 cubic meters. It is this that has brought about the paucity
of water in the marshlands. "
10 Economics
,
Currency �tes
The dollar in deutsche .. arks
New York late afternoon fixing
1.70
1.60
J
I
".' "
,-
I.SO ' � .,-
I\. � lr"-V-
1.40
1.30
,
i
J'
9/23 9/30 10107 10/14 i 10111 10118 1114 11111
The dollar in yen
New York late afternoon IIxlng
140
130
120
110
100
-
9/23 9130 10107 10/14 10111 10118 1114 11/l1
I
The British pound in dollars
New York late afternoon IIxIng
1.80
1.70 J � .-..
yo
I
I
:
I
,
-
'"'
1.60 �
I �
rv.
I.SO ""I'll'
1.40
9/l3 9/30 10107 10/14' 10111 10118 1114 .t1/l1
The dollar in Swiss frBIlcs
New York late afternoon IIxlng
1.50
1.40 , I'"
1.30 /
�
""""
-
1.20
"' ....
�
1.10
9/23 9/30 10107 10/14 10111 10118 1114 11/l1
EIR November 20, 1992'
.'
..

Swiss suspicious
of Maastricht Treaty
This article is excerpted from Swiss Economic Viewpoint,
the newsletter of the Overland Bank Group. dated October
1992 . On Sept. 20, French voters passed a referendum
approving the Maastricht Treaty by a margin so narrow that
most observers considered the plan doomed in its present
form . On Nov. 4, British Prime Minister John Major survived
a vote in Parliament on Maastricht, to which he has
strongly committed his government despite widespread dissent
including from within his own Conservative Party,
again by the thinnest of margins. The Maastricht Treaty
would replace the previous pact which joined the European
Community of 12 nations in a common market, with a "single
market" concept. EIR does not endorse the views expressed
here, but reprints them as an example of growing resistance
against Maastricht.
The decision of the Danish people to reject the Maastricht
Treaty has made the European integration process a central
point of discussions. This treaty calls for a single European
army, foreign policy, currency, tax policy-in effect, a single
European state. In the process, the worry is that all of
what makes each country special, Switzerland in particular,
will be lost.
The intricacies of this process are so complicated that
prediction is practically impossible. In growing numbers , the
Europeans are voicing their concerns. They are opposing
the stand taken by their governments, as the Danish people
rejected the prior approval of their government in June and
dealt the Maastricht Treaty its first defeat. It will likely not
be the last. In short, we hope to make it clear that the voters
of the various countries are not going to jettison their nationality,
institutions, and independence to become part of a
bland and bureaucratic European superstate.
Of special interest to us and our clients are the effects a
Swiss entry into the European Community might have. The
Swiss government decided earlier this year to seek entry into
the European Community. However, deciding to seek entry
is not the same as joining. First, the EC will issue an opinion
on whether and how much the Swiss must change their laws
and institutions in order to join. As we'll see, the EC may
want Switzerland to pledge change in many ways that even
the Swiss government may not like . . . .
EIR November 20, 1992
The coming Swiss referendum
The Swiss face a referendum on D�c . 6, 1992. However,
it will not be on whether Switzerland �hould join the EC, but
rather whether it should join something called the European
Economic Area (EEA).
There have long been two free-tr!lde groups in Europe.
The 12-member European Community is the most famous,
the so-called Common Market. But there has long been another
common market in Europe, European Free Trade Association
(EFTA). Its members are Austria, Finland, Iceland,
Liechtenstein, Norway, Sweden, and Switzerland. Unlike
the EC , the EFT A never envisioned political unity as one of
its goals. It was strictly and specifically a free-trade association
.
In 1991, officials from these two groups agreed to a type
of merger, the EEA. This merger wo�ld not involve political
or currency union, being confined to temoving all economic
restrictions between the two groups . Products, services, labor,
and capital would be able to flow with complete freedom
from one European country to anotl)er. The merger is set
to begin on Jan. 1, 1993. This is the subject of the Swiss
referendum on Dec. 6.
Many, and probably most, Swiss lare against this idea of
linkage . . . .
lf the Swiss vote yes on Dec. 6 arld join the EEA, it will
mean the unrestricted movement of labor, as well as goods.
Anyone in western Europe would be able to work and live in
Switzerland which already has far more foreigners per capita
than any other European country. 4 certain fear exists at
throwing open the gates to a potential pool of upwards of 200
million people who may be tempte� to come to a country
where living standards are higher. I
On top of this, the unemployme" rate in Switzerland is
now 3.1 %. This may seem quite low+after all, Italy, Spain,
Portugal, France, and Greece all h3lVe jobless rates in the
double digits. All the more reason for these foreigners to
want to come, many Swiss would sa}!.
But a 3.1 % jobless rate is extreme�y high for Switzerland.
In a nation where for years unemployment was a fraction of
one percent, and just a year ago wa� 1.3%--considered at
that time too high-such a rate fright�ns many. . . .
Opposition from farmers, b
Aside from the general worries about unemployment,
strong negative sentiments are voic within the organized
and politically powerful Swiss f ng sector. As in most
nations, Swiss farmers are protected d subsidized, for reasons
deeply rooted in Swiss history .nd culture. The nation
is profoundly aware that in recent history it was surrounded
by potential enemies. The Swiss haid to depend on homegrown
food, knowing that food impqrts could have been cut
off at any time.
For the same reasons that Switz�rland has enough beds
and fallout shelters to protect each a�d every citizen, so too
Economics 11

does the nation want to be certain that there will always be a
good supply of home-grown food. . . .
Another powerful group would stand to lose from Switzerland's
entry into a fully united Europe: the banking industry.
The banks' primary concern is not the secrecy aspect.
For instance, we look at EC founder Luxembourg, which
has good banking confidentiality laws, and believe fears
of secrecy eroding in Switzerland are probably exaggerated.
But full EC integration implies a single currency.
The Swiss franc has a proud tradition: No other currency
in the world has so consistently kept its value over the
decades. For this alone, many and probably most Swiss
would be loathe to give it up in favor of a new, cobbledtogether
ECU.
But even this is not the primary objection voiced by bankers.
A sizable portion of profits comes from foreign exchange
conversion. . . . If all these currencies were replaced by a
single ECU, foreign exchange departments would become
obsolete. Of course, ECU/dollar and ECU/yen transactions
would still occur, but their volume would be a far cry from
the combinations available today.
For these reasons, we have doubts that Switzerland will
join the EC in the near future. The power of these two sectors
of the economy cannot be underestimated. . . .
The [Maastricht Treaty] document envisions a Europe
What Idlls millions of people?
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12 Economics
where most national characteristics and institutions are superseded
by a vague supra-national bureaucracy. We believe
that the more each member nation discovers this, the more
unpopular the Maastricht Treasty will be. The Danes have
already discovered it; the Swedes, as we'll see, are learning;
the Swiss will not be far behind. Whether the Maastricht
Treaty goes against human nat"\lre-against the fundamental
craving to preserve one's indivliduality-is deb�le. But it
certainly goes against the Zeitgeist. The spirit that appears to
characterize these times is, likd it or not, nationalism.
Nationalism can take both tood and bad forms. The call
emanating from Belgrade for ethnic cleansing in the name of
a "Greater Serbia" is a stark anell bloody example of the latter
form. But there is nothing at :all wrong with the peaceful
Danes deciding that joining a united Europe could cause them
to lose control of their own fOr¢ign policy. . . .
Collapse by December
By December, the whole idea of a single political and
currency unit in Europe may Ihave collapsed. The people
of the EC may reject this dollectivist idea and simply
make, as Margaret Thatcheri apparently wants, a loose
European confederation . . . . Switzerland would be happy
to be part of this type of order-provided it was not
obliged to change any of the institutions that have served
it so well for centuries.
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EIR November 20, 1992

Report from Bonn by Rainer Apel
It's either depression, or recovery
Germans are faced with the same basic choice as Americans : to
build their way out of this depression or suffer austerity.
Most German media and observers
of the U.S. elections noted that the
defeat of George Bush was due to the
worsening economic situation. But
the saying among political insiders
here goes that if Chancellor Helmut
Kohl were up for reelection now, he
would suffer the same fate as Bush.
Ironically, a victory for the opposition
Social Democrats would occur
for the same reasons that Bill Clinton
won: He was not Bush. A challenger
to Kohl would be elected mainly because
he would not be Kohl. As a party
, the Social Democrats offer no alternative
to the austerity policy of the
governing conservative-liberal cabinet
in Bonn.
This puts Germany in a dangerous
box at a time when there is talk of
the public debt getting out of hand, a
potential bankruptcy of the state, and
of a currency reform. The Federal Accounting
Office opened the round of
revelations about the real state of the
economy in early November with a
forecast that the public debt, which
is now at DM 1.6 trillion, will be at
DM 2.0 trillion by the end of 1993.
In a Nov. 6 interview with the daily
Bildzeitung. Heinz Guenther Zavelberg,.
the head of the accounting
office, warned that the state would
have to declare formal bankruptcy in
the late 199Os, if the present rate of
debt growth could not be reduced.
While the state had to pay DM 80 billion
in 1990 for the servicing of debt,
it will pay DM 170 billion in 1995,
said Zavelberg, adding that he didn't
want to "speak about today, tomorrow
, or the day after tomorrow-but
sometime in the future, this will be the
situation. "
EIR November 20, 1992
Ingrid Matthaeus-Maier, spokesman
for the Social Democrats on fiscal
policy, has warned against a "state of
economic emergency, " pointing at the
mountain of debt that has been piled
up already. If the state were forced by
the banks to pay off its debt (the way
Third World nations are forced to do
by the International Monetary Fund),
it would have to pay DM 700 million
daily, and since the German taxpayer
can't afford that, the government
would have to declare bankruptcy like
any other bad debtor, she said.
The debate on the economic situation
was further dramatized when Finance
Minister Theodor Waigel announced
on ' Nov. 6 that his trip to
Moscow the following week had been
canceled. Officially, the political chaos
in Russia was cited, but many in
Bonn emphasized that revised data on
the fiscal situation made it impossible
for Waigel to travel to Moscow,
where he would have had to present
more than his empty coffers to make
his trip a political success.
The new data on expected state tax
revenue for this fiscal year, revised
by the ministerial advisory board in
October, showed that the May estimate
of a DM 5 billion surplus was
wrong. The new estimate came on the
eve of the decisive round of debates in
the parliament on the state budget for
fiscal year 1993.
As it looks now, tax revenues will
be DM 600 million less this fiscal year
than originally forecast, and another
DM 7.5 billion less in the next fiscal
year. The publicly admitted difference
of DM 5.6 billion for FY 1992
may not even be the full story. In an
"unauthorized statement," Econom-
ics Minister liirgen Moellemann
mooted the discovery of a DM 20 billion
shortfall in tax revenues.
Bonn's "remedy" is a brutal one:
Cut wages. Horst Koehler, the outgoing
deputy finance minister, told the
Christian Democrats' economic council
on Nov. 11 th�t Germans should get
used to the idea that "for some years,
their real incomj::s will drop significantly."
Waigel gave the same message,
telling the� council of a phony
bookkeeping triqk, that "I % of lowered
interest rate!! will spare the economy
DM 6 billiont- 1 % less increase in
wages will sparel DM 11 billion."
Former Soci�l Democratic Labor
Minister Herbert Ehrenberg recently
pointed out that: 100,000 more jobs
would mean addttional tax revenue of
DM 3 billion; but 100,000 fewer jobs
mean additionall expenses of DM 3
billion for social �elfare, jobless benefits,
etc.
More reasonable people here may
differ, but they all agree on one point,
that only state intervention for the
launching of great projects of infrastructure
improvement can create a
sufficient number of jobs to visibly
improve the taxi base. The construction
of the natioq's first 240-kilometer
maglev line be�een Hamburg and
Berlin, projecteqI for the late 1990s,
will create about 100,000 industrial
jobs and incre�se the tax base by
DM 3 billion ye$rly.
The parallel i construction of 280
kilometers of qtaglev line between
Berlin and Dresden (not yet in the national
transporta�ion plan) would create
150,000 job� and improve the tax
base by another OM 4.5 billion.
Building a maglev line of 560 kilometers
between Berlin and Frankfurt-Main,
as proposed in 1991 but rejected
by Bonn, would create 250,000
jobs and generate DM 7.5 billion in
tax revenues, which would cover the
shortfall expected in FY 1993.
Economics 13

Banking by John Hoefle
Mistakes in S&L crisis to be repeated
With the banking crisis zooming out of control, the bankers and
their regulators are screaming for forebearance.
DesPite all the promises from elected
officials and bureaucrats that a savings
and loans-style crisis would never
again occur, such an event is well
under way among the commercial
banks. Just as federal regulators encouraged
the S&Ls to engage in all
manner of insane speculative activities
during the 1980s, then looked the
other way when the system inevitably
crashed, so too have regulators turned
a blind eye to the worthless assets and
loans littering the balance sheets of the
bankrupt and even more speculative
U.S. commercial banking system.
When the need for a taxpayer bailout
of the bankrupt S&L system was
admitted publicly in the wake of the
1988 presidential elections, government
officials fell all over themselves
promising an end to regulatory forbearance,
the practice of overlooking
financial problems in the vain hope
they will eventually go away. But now
a panicked government, faced with
the imminent collapse of huge chunks
of the banking system, is increasing
its demands for forebearance.
The latest example of this phenomenon
came on Nov. 6, in remarks
by outgoing Office of Thrift Supervision
chief Timothy Ryan to the Savings
and Community Bankers of
America in San Diego, California.
Ryan claimed that the government's
overreaction to the savings and
loan crisis had "created a climate of
fear, and fear produced an overly restrictive
supervision" by federal bank
and thrift examiners. As a result of
government regulatory ambiguity,
Ryan said, "honest directors and officers
developed unwarranted fears of
14 Economics
lawsuits, and went out of their way to
avoid certain types of lending . . . out
of fear for their personal exposure."
Ryan claimed that regulators had
difficulty in instructing examiners to
treat the banks more fairly, without
giving the impression that they should
ignore bad loans. "It's hard to tell people,
when it's their job to be good,
solid examiners, that they've gone too
far," Ryan said.
The government did indeed create
a "climate of fear" in the S&L world,
with its prosecutorial vendetta against
virtually anyone associated with a
failed S&L. But while the feds were
excoriating the thrifts and the examiners
who supposedly failed to see what
was happening, the assets and deposits
of the failed thrifts were being funneled
into the commercial banks,
which were the real beneficiaries of
this regulatory witchhunt.
Now, however, with the bailout of
the commercial banks under way, the
attack dogs at the Justice Department
have been muzzled. No one is calling
for the head of John Reed, the chairman
of the bankrupt Citicorp, for example,
even though the losses to the
taxpayer from Citicorp will dwarf the
losses from Charles Keating's Lincoln
Savings and Loan. Keating was treated
as public enemy number one, and
the politicians who helped him were
savaged, but the commercial bankers
and their allies receive no such unpleasant
treatment.
On the contrary, regulators are
desperately trying to reduce the alleged
regulatory burden being placed
upon the banks by "outmoded" banking
laws-things like requiring banks
to set aside sufficient reserves against
bad loansi or maintaining reasonable
equity capital. And of course, bank
examiners, who insist on questioning
the value of banks' worthless assets,
are whipped into line .
The Bush administration has
placed extraordinary pressure on
banks and, thrift examiners to hide the
extent of the problems at commercial
banks. In December 1991, the administration
called nearly 500 bank examiners
fromlaround the country to Baltimore,
fOlt what can accurately be
characterited as a political indoctrination
session. The message: There are
no problem banks.
You should carry out your job "in
a way that promotes economic
growth," Deputy Treasury Secretary
John Rob�on ordered the examiners.
"You are �couraged to give the benefit
of the doubt, even if it might ultimately
tum out to be a misjudgment.
. . . Do n�t assume a doomsday scenario."
To make sure that the examiners
followed their orders, regulators set
up procedures whereby bankers could
protest examiners' decisions directly
with top pOlitical appointees in Washington,
bY1?assing normal channels.
The pOlitical nature of this regulatory
indoctrination was further underscored
Dec. 17, when White House
press secretary Marlin Fitzwater finally
admitted that the economy was
in a "recession," and on Dec. 18,
when Federal Reserve chairman Alan
Greenspani admitted that the economy
"clearly had faltered." Two days later,
the Fed dropped the discount rate 1 %,
to 3.5%, iti; lowest level since 1964.
By June 1992, Robson told the
American iBankers Association, "the
regulatory · element in the credit
crunch had eased." But now, with the
banking crisis back with a vengeance,
the feds are once again screaming for
forebearance.
' EIR November 20, 1992

Agriculture by Suzanne Rose
Minneapolis hosts free trade meet
Cargill and the cartel crowd pushfor more looting rights, and
are depressing the miserable prevailing wage in Mexico.
T wo events in Minneapolis in mid­
November highlight the fact that though
the administration may change party
name, the flurry of activity around free
trade agreements continues unabated.
The debt burden on the world economy
is driving financial circles to impose
free trade agreements, in the futile hope
that increasing exports, made cheaper
by slave labor, will solve the debt payment
crisis.
It is no accident that Minnesota
serves as a chosen center of organizing
for the free trade agreements (the
U.N. General Agreement on Tariffs
and Trade [GATT] and the North
American Free Trade Agreement
[NAFTA]), because it is home to the
giant grain cartel company Cargill,
Inc., and the Cargill-sponsored Hubert
Humphrey Institute for International
Affairs .
On Nov. 12, these interests sponsored
a conference entitled "Southern
Exposure: A Business Conference for
Firms Interested in the Latin America
and Caribbean Marketplace." Various
labor groups attempted to get the conference
canceled, because they
claimed that the state of Minnesota
was spending money to sponsor a conference
to recruit businesses to move
to Mexico and deprive them of jobs.
Just a glance at the agenda confirms
such fears . At each of the six
sessions, a country was "presented"
by national representatives to the assembled
executives and managers of
Minnesota companies, for the purpose
of recruiting their businesses to move
to the selected country. The sessions
had titles such as "Presenting Brazil,"
EIR November 20, 1992
"Presenting the Dominican Republic,"
and "Presenting Colombia. "
The inclusion of so many Caribbean
and Central American countries
gives credence to what many obervers
suspect, that these nations will soon
be added to a free trade agreement
with the United States, thus placing
more downward pressure on labor
costs, below even Mexico.
The issue of government backing
for the conference became so hot that
both the Minneapolis City Council
and County Board passed resolutions
making it clear that they were not
sponsoring the conference financially.
However, it seems that the conference
was the brainchild of an international
trade office which is sponsored
by both government agencies.
The public sponsors of the conference
included the International Trade
Advisory Board, which represents the
multinational grain cartels in the government
free trade negotiations, and
the Greater Minneapolis Chamber of
Commerce, which has been a front for
the grain traders since World War I.
Also on Nov. 12, the Minnesota
Agri-Growth Council invited Arthur
Dunkel, director general of GATT, to
keynote its 25th annual membership
meeting. Other presentations featured
Robin S. Johnson, vice president of
public affairs for Cargill, and Dr. C.
Ford Runge, a Cargill-allied agricultural
economist at the ' University of
Minnesota. Johnson has attended
many of the government GATT negotiating
sessions.
Dunkel is expected to urge a swift
conclusion to the stalled GATT nego-
tiations as an alt�ative to a new U.S.
trade war against Europe.
At the center10f the free trade conspiracy
in Minne�ota is the Minneapolis-based
Humpl!trey Institute, one of
the major centers promoting NAFT A.
The dean of the 'institute, G. Edward
Schuh, was a spokesman for NAFTA
as negotiated by ,the Bush administration
at House Agriculture Committee
hearings in September. Humphrey Institute
economiSts promote China as
the model for underdeveloped countries
seeking to make the transition to
free markets and free trade. And it is
not accidental that Minnesota meatpacking
and fo�-processing companies
have demonstrated a penchant in
recent years for the Chinese model of
coolie labor in factories.
The packing l>lants routinely bring
Mexican labor in to undercut the
state's pay scal�s. The Tony Downs
chicken-processing plant in Madelia
was recently exposed for recruiting to
Minnesota and exploiting a largely illegal
Mexican work force.
The Green Giant plant, a Minnesota
company wihich is an arm of the
flour-milling conglomerate Pillsbury,
came under scrutiny in a Sept. 24 Wall
Street Journal article entitled "The
Lure of Cheap Labor." Green Giant
not only moved its plants to Mexico
in search of lower labor costs, but its
plants in Mexicd pay, at $.83 an hour,
less than Mexican-owned food-processing
plants. lhe company is therefore
contributing to even lower labor
standards than already existed. Green
Giant labels its full-time workers in
Mexico "seasonal, " so they are not eligible
for any of the employment benefits
of full-time I workers. "They are
barely able to put beans and tortillas
on the table. There is no indoor
plumbing, so seWage piles up. Families
share tiny huts with chickens and
flies buzzing intessantly,"
'
the paper
reported.
Economics 15

Business Briefs
Banking
Sweden grants banks
unlimited bailout
On Nov. 5, Sweden announced unlimited financial
guarantees for its banking sector, designed
to provide a safety net to prevent any
more crashes among the country's commercial
and savings banks, Reuters reported.
"The package could include many billions
of kroners, but it is impossible to speculate
how many today," Deputy Finance Minister
Bo Lundgren told a news conference when
presenting a draft bill. Independent finance
firms and insurance firms , also troubled by the
sagging economy and a collapse in the real estate
sector, were not included in the rescue
package.
The government said it will offer banks
and state-connected mortgage institutes loans
and guarantees to cover future credit losses and
losses on retum on assets , in addition to guarantees
to protect new capital issues.
"The mandate is not limited to any particular
amount," a government statement said.
"We had to draw the line somewhere, and we
made the judgment that the banks are the pivotal
players in the payment system, and that's
where we have to put inourguarantees ," Lundgren
said.
Health
WHO abandons strategy
of eradicating malaria
The World Health Organization (WHO) has
given up on a strategy to eradicate malaria and
is now seeking only to contain the disease,
Reuters reported on Nov. 2, based on a twoday
conference in Amsterdam in late October.
Malaria is probably the world's biggest cofactor
with HIV for AIDS. Chronic malaria
suppresses the immune system, and 1-2 million
people die every year from malaria.
"Attempts to wipe out the mosquito carrier,
pursued for 50 years with poor results, will
be made only in areas where there is a realistic
chance of success," the conference concluded,
16 Economics
said Reuters .
In fact, however, the malaria mosquito
was eradicated in many areas in the 1960s, and
the rest of the world was on track to do the same
through the use of DDT , which saved millions
of people from death. But malthusians forced
the ban of DDT in the United States in 1972,
which immediately reversed the decline in
mosquitos and malaria deaths.
It is only by 1995 that WHO expects to
have accurate figures on the number of malaria
cases. The conference heard that the malaria
strain now found in Thailand and Cambodia
is showing resistance to all the drugs widely
available to treat it. WHO officials expressed
concern at the lack of interest of western drug
companies in finding new drugs .
In Africa, each year approximately
800 ,000 Africans, mainly the poor, are killed
by malaria, the conference was told. Another
80 million Africans contract malaria but survive.
Alan Schapira, a WHO medical officer,
said: "There is an unfair accusation that things
cannot get done in Africa because of disorganization.
But even the toughest colonial-type administration,
given the African ecology,
would not get far against these [mosquito 1 species.
" Malaria is responsible for 20-30% of all
deaths of children under five in Africa.
The new WHO strategy is to focusonearlier
diagnosis, fast treatment, and earlier detection
of epidemics, but where the funds will
come from to carry this out was not addressed.
Monetarism
Russian military paper
attacks IMF, Eagleburger
KrasnayaZvezda (Red Star, the daily newspaper
of the Russian military ,) attacked the International
Monetary Fund (IMp) and acting
U. S. Secretary of State Lawrence Eagleburger
for their lack of aid to Russia. "I believe that
Moscow expected from its western partners
something more than the theoretical gimmicks
of acting U . S. Secretary of State Lawrence Eagleburger,"
Alexander Golts wrote in a recent
issue. "Russia is in need of investments . . . in
order . . . to set up the production of food and
medicine. But there are no such large-scale in-
vestments, and it looks as though there will be
none.
"It is an open secret that the aggravation
of [Russia's 1 internal political struggle is the
result of the continuing rapid deterioration of
the economic situation and the catastrophic decline
in . . . living standards ," Golts noted, but
"the IMF continues to insist on the unconditional
fuifillmentofits terms. They come down
to the stiPlillation that credit lines will be open
only after:the Russian government succeeds
in curbing, inflation. But . . . this can only be
done by oqe method-halting credits to industry
and frtlezing all forms of payments to the
populati0'l. In other words , by further reducing
the RU$sians' living standard. The government
will : hardly risk proceeding along that
path." i
Golts proposed: "We are in far greaterneed
of a program to stabilize industrial production,
geared to our own forces. And a program elaborated
witI!lout considering the demands of the
IMF or ady other western financial institutions,
elaborated on the basis of the conditions
existing iQ our country and not on the basis
of someollie else's views. We need finally to
realize what we can do for ourselves and proceed
froml that. And perhaps then the West
may run the risk of helping us?"
Aerosplil:e
I
lATA head warns of
another bad year
I
International Air Transport Association
(lATA) Director General Gunter Eser warned
in early November that the world's airlines
face another bad year in 1993, and predicted
that job 10$ses in 1992 will exceed those of
1991, when the world's airlines eliminated
3.4% of IJ45 million jobs, or about 52,000
jobs. Eser said that lATA's 213 passenger air
line members will probably lose at least $2.5
billion this year, with half of the losses coming
from the five or six largest airlines in the United
States. i
Eser noted that the world's airlines were
expected tOIPurchase 5 ,400 airliners by the end
of the decade , with a total value of$400 billion;
but that the actual value of the world's airliner
EIR November 20, 1992

fleet is now only about half that. Even optimistic
observers believe that airlines can find the
financing for only about 40% of the purchases
needed. "There has to be some solid economic
basis for airline operations in the future because
the industry has some very heavy investments
to make," Eser warned.
Environmentalism
Indians used against
national patrimony
Environmentalists' efforts to shut down mining
operations in lbero-American nations,
have involved the manipulation of Indians in
these areas. The Wayuu Indians in Colombia's
upper Quajira Peninsula along the Caribbean
Coast, for example, have been deployed to
shut down the Cerrejon mining project, one of
the continent's largest and richest coal veins.
The Indians are claiming that their proximity
to the coal-mining operations has led to everything
from high miscarriage rates to respiratory
diseases of all sorts, prompting the country's
constitutional court (a spawn of the narco-terrorist
Constituent Assembly of December
1990) to order the govemment to create
"mechanisms" for solving the problem.
An environmental agency of the Colombian
Health Ministry has determined that none
of the illnesses identified by the Indian inhabitants
of the region is attributable to the mining
operation. But it is now reported that the UnitedNations
will finance a study and recommendations
on the Wayuu's problems .
Among the problems not likely to be addressed
are the fact that 66% of the 129,000
Wayuu are completely illiterate, and another
20% have no more than one year of primary
school .
The crux of the problem was fairly
summed up by a journalist for the Brazilian
newspaper Jomal do Commercio, who, in
commenting on the new Brazilian government's
determination to shrink the vast Yanomami
Indian reserve that was granted by the
previous Collor govemment, said: What the
Yanomami "need is medical assistance. From
contact with whites, the Yanomami are suffering
a wide variety of illnesses and are being
EIR November 20 , 1992
decimated at a dramatic pace. There is no advantage
to them to be owners of extensive
lands rich in minerals. What they need is the
right to life. "
Labor
U.S. said to have been in
depression for 19 years
From the standpoint of real economic parameters
, the United States has been in a depression
for 19 years, Dr. Wallace Peterson, professor
of economics at the School of Business Administration
of Lincoln, Nebraska, said in an
interview with the Nov. 4 Spanish daily El
Pais. His remarks echo analysis found only in
EJR over that timeframe.
Peterson, a self-professed Keynesian who
recently won the "Veblen-Commons Prize" in
economics, coined the term "silent depression"
for what has happenedtothe U.S.economy
. "Our deterioration is much more serious
than the conventional statistics would have us
believe. . . . For the first time since the Second
World War, there is a simultaneous fall of production,
services, and goods, which is hurting
the white-collar worker as much as the bluecollar."
From the conventional statistical standpoint,
this cannot be explained , and the United
States should supposedly now be experiencing
a recovery. So, "why does a state of recession
continue?" he asked, stressing that conventional
unemployment and Gross National
Product statistics have become "irrelevant."
What must be looked at, instead, is a real parameter
like the income of a wage-earner in a
single family. "Real income determines living
standards, which indicate economic progress."
By this measure of real farnily income,
the U.S. economy, in fact, "has been depressed
now for 19 years."
According to Peterson, from 1948-73 the
average rate offamily income grew in the U .S.
by 2.7%, but since 1973, the growth has been
0.37%. Even more important is the fall in the
rate of production. In the 1948-73 period, it
grew by 2.5%, but this figure has dropped to
0.83% since 1973. Such figures "translate into
facts," Peterson said.
• A POLIq EPIDEMIC has hit
the Netherlan�s, and has claimed its
first victim. �ecause health officials
have not beenlinsisting on a policy of
mandatory v�ccinations, 22 people
have already �ontracted the disease.
,
• SIX MILlION TONS of food
are needed � year to prevent widespread
famine� according to the Famine
Relief R�port of the European
Community. �ut according to its own
figures, it hasjonly delivered 1.8 million
tons of ai� so far. According to the
EC's OctOberitatiStiCS, the EC has 28
million tons 0 food reserves, which it
has so far bee unwilling to touch.
I
• 'PAKISTtN may have to develop
its own" uclear power plants if
restrictions 0 exporting such plants
to Pakistan are not lifted, Pakistan
Atomic Ener�y Commission chairman
Ishfaq �mad said, Reuters reported
Nov. �. While not specifying
the capability pf the program, Ahmad
said that "it nassed its infancy stage
long ago."
• UKRAI� does not plan to sell
.
an aircraft c�' er to China, Ukrainian
President onid Kravchuk said in
Beijing on t. 31. Kravchuk said
that his visit tf> China had opened the
way for othet military cooperation,
and that he h�d offered to cooperate
on developing the new AN-180 aircraft,
an upgr.ded version of a former
Soviet troop �ansport.
• THE 'dHINA MODEL' to
which the Ru�sian opposition is looking,
is a "br�' d and circuses" operation,
the Ge an daily Die Welt said
on Nov. 3. ocused on food, consumer
produ ts, and small businesses,
the mod 1 cannot succeed for
long, the pa r said.
i
• JAPAN !will resume development
aid to �ietnarn this year after a
14-year susptjnsion, a Foreign Ministry
official sa� on Nov. 4. Nihon Keizai
newspap¢r said the government
would approlVe a 45 .5 billion yen
($369 millio*) aid package. Tokyo
suspended s*h aid to Hanoi in December
19�8 when Vietnamese
troops invad� Cambodia.
1
Economics 17

�ITillFeature
:
LaRouche's iideas
reach Moscow in
time of troubles
by Rachel Douglas
In a message sent from prison to his collaborator� on Sept. 2, 1991, a fortnight
after the failed coup in Russia and Ukraine's decl/ll'ation of independence set in
motion the breakup of the Soviet Union, Lyndon LaRouche urged the rapid expansion
of "a broad international movement, which clamors for the kinds of physicaleconomic
reform . . . needed to get the world out M its present mess."
Such a clamor was heard in Moscow on Oct� 30-3 1, 1992 at a conference
on "Alternative Approaches to Economic Refol'ql." Organized by the Schiller
Institute, the Russian State Humanitarian University, and the Ukrainian University
in Moscow, among others, the event drew partiQipants from Russia, Ukraine,
Armenia, Latvia, Sweden, Germany, and the United States (see EIR , Nov. 13).
Inflation running at more than 4% per week, polverty that has engulfed 90% of
the population, production and distribution of inqustrial goods at a standstillthese
realities of Russia in late 1992 lent an urgency to the conference discussions
on how to craft economic policy. This latest phase10f the crisis in Russia resulted
from measures adopted by the government of acting Prime Minister Yegor Gaidar,
to win favor with the International Monetary Fund (lMF). Subsidies for industrial
production were canceled and prices unfettered, wi�out a competent replacement
economic policy being in place.
The IMF prescriptions are more and more detested, but among those eager to
exploit the backlash are communists from the old ruling nomenklatura and Great
Russian chauvinists, who have declared their goal of restoring power within the
borders of the former U.S.S.R. The certain resis�ance to such a drive from the
newly sovereign nations, including ones like Ukr.ine and Kazakhstan that have
nuclear weapons, defines a danger of catastrophic ,war. Eurasia is already dotted
by local wars, so that the nightly news on Radio Russia leads with combat reports
from half a dozen battlefronts.
Intervening at the conference, Armenian parlijamentarian Igor Muradjan reported
with the example of his country, on the double curse of war and IMF terms.
18 Feature EIR November 20, 1992

Helga Zepp-LaRouche, founder of the Schiller Institute, said
in her message, read at the conference: "I believe I understand
what agony, resignation, and desperation many people in
Russia are living through . While a short time ago there was
the hope that the opening of the borders of Europe would
bring an improvement in conditions of life of the population,
this hope has been bitterly disappointed . . . . We are already
in the beginning phase of the Third World War, which will
probably take the form of a Thirty Years' War, in which local
and regional wars spread like wildfire . . . .
"The decisive question is whether we can overcome this
depression-which is already worse than the one in the 1930s,
out of which fascism developed, and which this time threatens
to become global-with the means which led to the reconstruction
in western Europe after World War II. One thing is certain:
If we have learned nothing from history, we will be condemned
to repeat it as a tragedy. We will be able to escape this tragedy
if, from out of this crisis, we are able to free ourselves from the
evil which has dominated the entire nineteenth and twentieth
centuries: oligarchism and geopolitics."
A theme of the conference, as the following selections
from the proceedings show, was that a crisis of this magnitude
requires not formulas for solving one or another of its
aspects , but a method for generating innovative , bold solutions.
A major event at the colloquium, therefore , was the
distribution of pre-publication copies of Lyndon LaRouche's
book So, You Wish to Learn All About Economics? in Russian.
Prof. Taras Muranivsky, conference co-chair, is the
EIR November 20, 1992
I
At the Moscow
conference on
"Alternative
Approaches to
Economic Reform , "
from left : Jonathan
Tennenbaum (in
profile), of the Fusion
Energy Forum; Prof.
Taras Muranivsky,
conference co­
chairman and rector of
the Ukrainian
University in Moscow;
Anno Hellenbroich,
conference co­
chairman and
representative of the
Schiller Institute;
translator; Michael
Vilt and Michael
Liebig of the Schiller
Institute .
scientific editor of the Russian edit' on.
Dr. Viktor Petrenko, translator of this first book by
LaRouche to appear in Russian , briefed the conference on its
central concepts. "This book opens bp for us a new world," he
said, "the world of 'physical econJmy' and 'natural law .' "
LaRouche's foreword for the R ssian edition of his book
aptly expresses the sense of the M9sCOW conference:
'The Russian edition of this textbook appears at the moment
the greatest financial bubble in history is collapsing
upon us. If we fail to take appropriate corrective action soon,
this collapse could become the w rst economic disaster in
European history. . . . Out of the reckage of that monetary
collapse, a new form of national economy must be construct-
I
ed, from the remains of the existing industry , farms, and
infrastructure. . . . I
"Nations which survive learn two leading rules for
shaping of their economic policy. First, it must be recognized
that economy is essentiall physical economy, and
that never again must money b elevated to any higher
political authority than merely a means of fostering the
production and physical distribution of tangible objects of
newly produced wealth. Second, 6conomic policy must be
premised upon the fact, that !he continued existence
of humanity depends absolutely upon the continuation,
indefinitely, of those improveme ts in knowledge, and in
capital-intensive, energy-intensiv modes of investment
in productive techniques which Iwe associate . . . with
generalized scientific and technological progress."
Feature 19

The world economy
in depression
by Michael Liebig
Michael Liebig, director of E1R Nachrichtenagentur, estab­
lishedfor the MoscJw conference participants that the eco­
nomic breakdown in Russia and eastern Europe, hideous as
it is, is only one component of a global crisis. The worldwide
financial collapse means that the belief, still widespread in
Russia, that the International Monetary Fund or other insti­
tutions of the collapsing Versailles and Bretton Woods sys­
tems have anything at all to offer, is a delusion . These ex­
cerpts include the conclusion of Liebig's presentation .
The following remarks focus on the economy of the United
States, still the single largest sector of the world economy.
Albeit with modifications and time" intervals, most of the
mentioned trends have materialized in the other sectors of
the world economy as well. . . .
In 1989 the process of decomposition of speculative financial
accumulation began to spread to the eroding real
economy. Overindebtedness in agriculture led to the bankruptcy
of 30% of America's family farms. The massive losses,
insolvencies, and mass layoffs began in the aerospace
industry and spread through the auto industry , machine tools,
chemicals, and finally the high-tech sectors such as computers
. Reduced purchasing power resulted in an escalating crisis
in wholesale and retail trade , contraction in turnover, and
the closure of numerous shopping chains. The use of credit
cards and the growing employment of housewives veiled the
" 20 Feature
Konstantin George Taras Muranivsky
fact that the real purchasing of the average industrial
operative in the U.S.A. had incrementally but steadily
since the beginning of the 1 I . With the layoff waves of
the 1990s, disposable family 1n{"-'TY">� of the American mid-
I
die class began to collapse, a tuation exacerbated by the
pressures to pay off consumer . Rising unemployment
goes along with relative or impoverishment of the
growing so-called marginalized lJVII-'UJ.QUVJJ.
Austerity and ne4[)-con)or'atism
One would think, that with
liberalism led to the depression,
ism, the traditional "anti-cyc
would have arrived. Over the I
ism in practice swallowed up
debt-"deficit spending"-of
1980s during the Reagan-Bush
mately $4 trillion . Debt service
cially absorbed 17% of the
public debt was incurred wi
effect. Worse yet, the gigantic
practically usurious credit
realization that economic
hour of neo-Keynesianconjunctural
policy,
American neo-liberal­
''',,''''UJJ�'JJ. The public
spiraled over the
tractive to foreign and domestic .n"',,"OTAro . There is no room
any longer in the U.S.A. for " " expenditure programs
on the Keynesian model.
Keynesian "deficit spend
to access private national and
International investors became HII..,I C;.'�H
larly since 1987, to continue to
deficit spending, even when
rious conditions. In September
of the International Monetary
"IMF surveillance," declaring
able and demanding tax hikes
300 billion per year in order to
Faced with this dilemma
Jonathan Tennenbaum
offered objectively usu-
992, the board of directors
put the U.S.A. under
federal deficit unmanagebudget
reductions of $250the
deficit. . . .
Anno Hellenbroich
November 20 , 1992

Saxon world and the deepening recession in Europe and Japan,
the transatlantic financial establishment's consensus is
opting for a strategy of deflationary austerity and neo-corporatism
. Austerity signifies a reduction of the average standard
of living through income reduction, tax increases, and cuts in
social expenditures. Neo-corporatism contains elements of
economic policies of Mussolini fascism in Italy, Nazi economic
policy designed by Hjalmar Schacht up to 1936 in Germany,
the economic policy of the Swedish social democracy
in the 1930s, and the Roosevelt "New Deal" in America.
The integrity and servicing of the debt structure is the
chief task of neo-corporatist economic policy . . . . With neocorporatism,
economic and social policy is increasingly taken
away from parliamentary institutions, instead it is determined
by a combination of government agencies, private
"expert" institutions, and trade unions integrated with them.
Government-sanctioned and -financed private mega-cartels
of illiquid financial and industrial enterprises are to be created.
Foreign economic policy would tend to become increasingly
aggressive .
The case of Felix Rohatyn
One of the most important proponents of neo-corporatism
in the U. S. and internationally is New York financier Felix
Rohatyn, who almost certainly will play a key role in or
behind the next U. S. administration, even in the unlikely
case that the next President is not Bill Clinton, whose close
adviser on economic policy he is, just as he is a long-time
friend of Ross Perot. Rohatyn plans for government and
Congress to relinquish budgetary affairs in favor of private
financial administrations, which would be able to implement
the necessary, drastic reductions in expenditures "without
regard to electoral-political concerns."
Rohatyn also wants the resources of public and private
pension funds to be made accessible to the state by forcing
them to purchase special state bonds. Some $4,000 billion
Igor Muradjan Rachel Douglas
EIR November 20, 1992
are to be made available by this means over the 1990s. In the
mid- '70s, Rohatyn himself headed up such a private compulsory
administration for the over-indebted, insolvent city of
New York, the Municipal Assist�nce Corporation ("Big
MAC"). Rohatyn proposes to appl this model of austerity
for the United States as a whole ... 1.
One wonders if the transatlantic financial establishment,
pursuing austerity and neo-corpora ist economic strategies,
has forgotten the results of austeri y/corporatist policies in
1930s. They seem to have overlooked the results of the smallscale
experiment in New York Cit� under Rohatyn, which
today is worse than ever. These polities triage the real economy
in order to sustain an unsustainable financial structure.
The head of the House Banking

IMF 'cure' is worse
than the disease
by Konstantin George
Konstantin George is EIR intelligence director for Russia
and eastern Europe.
The truth to the statement headlining this presentation ought
to be clear to anyone who has observed or suffered under the
economic catastrophe that has struck Russia this past year,
as Acting Prime Minister Yegor Gaidar has implemented, or
tried to implement, the conditions demanded by the International
Monetary Fund . . . .
Since the 1982 Latin American debt crisis, the IMF has
acted as the New York banks' policeman to collect the Latin
American debt and all Third World debt. The usury that the
IMF polices does not simply mean a high debt as such. The
purpose of usurious interest rates-and that has been the case
since the Paul Volcker high interest rate policies of the late
1970s-is to create conditions of permanent debt bondage
for nations. This means that no matter how much of the debt
is paid back, the total debt owed always climbs higher.
In 1982, Third World debt was $800 billion. Today it
stands at $1,500 billion, after a decade in which the great
majority of Third World debtors received not a single dollar
in net new credit. A Third World debt study just released
by the German Starnberg Institute for the Study of Global
Structures, "Developments and Crises," states that from
1982 to 1992, the Third World paid $225 billion more in debt
repayment, interest and principal, than it received in new
capita\. The net capital drain has been far higher when one
includes hundreds of billions of dollars in flight capita\. The
so-called new loans, 1982-92, were to roll over existing debt,
to restructure the unpaid part of the former debt . .
Gaidar destroys the market
The IMF system contains two other devastating parallels
with the Bolshevik Soviet system: ideology to justify the
greatest of crimes, and being a liar. Just as Bolshevism developed
a communist ideology to justify the exercise of naked
power and crimes by a power clique, up to and including
genocide against a people, so the IMF has developed the
ideology of the "free market," toward which goal all and any
crimes are justified . . . .
The essential precondition for any real market is a society
of citizens who have the means to purchase goods. A popula-
22 Feature
tion with no purchasing power means no market. In September,
Gaidar himself partially admitted this fact, so obvious
to every member of Russian s()ciety. According to Gaidar,
who deliberately presented a picture much better than it actually
is, the results of the first eight months of his "shock
therapy" were: The price of goods rose 15.6 times, while
wages rose 10.6 times. Unemployment has soared, and again
according to Gaidar, 12 million Russians are living "below
the poverty line," a line defined by Gaidar at 1,200 rubles
per month.
Gaidar and the IMF can say "poverty line." But, as every
person in this room knows, 1,200 rubles or less per month
means the inability to buy even the most basic essentials for
biological survival. This fact was acknowledged by the U.N.
Food and Agriculture Organiaation, in its report on CIS
[Community of Independent States] food imports, released
Oct. 14, when the FAO declared that 12% of Russia's people
(which, by the way, is considerably more than Gaidar's 12
million, or approximately 18 million) have an income too
low to buy even basic foods. To use the FAO data, these
18 million people in the Russian Federation are not simple
"poverty" victims. Unlike the lying Gaidar, the FAO used a
higher realistic monthly wage than the Gaidar 1,200 rubles.
In today's Russia, one can't survive on 2,000 rubles any
more than one can on 1,200. These are 18 million people
who could die, and many will, once their savings and other
means of supplementing incomes disappear, and their sole
means of existence becomes this 1,200-2,000 rubles per
month.
Thus, after only eight months of IMF "shock therapy,"
some 18 million Russian citizens are in a potential death pool
if present policies continue. This is only the extent of the
tragedy concerning the Russian ,Federation.
As the FA 0 report reveals, the tragedy is worse in several
other republics. The FAO states, correctly, that Armenia,
Georgia, Tajikistan, Turkrneni$tan, and populous Uzbekistan
all depend on imports for more than two-thirds of their
grain consumption. The FAO ,report only covers the CIS
members, and thus omits the �rought-caused grain harvest
disaster in the Baltics this year. The Lithuanian grain harvest
was some 1.5 million tons, cOQlpared to 3.3 million tons in
1991. A similar fall occurred ill! Latvia, and in Estonia grain
harvested fell from 930,000 ton$ in 1991 to 400-420,000 this
year. . . . i
The best yardstick to sho\\j the collapse of purchasing
power is to compare 1985 with t�e present. What was bought
every month for 150 rubles in 1985, would require 15,000
rubles today. Thus, prices of goods and services used regularly
have risen since 1985 by abqut a hundredfold. The price
of non-food consumer goods h�s gone up far higher, as this
price index includes items su�h as urban transportation,
which has increased only twen�yfold, and basic food items
which have also increased far less than a hundredfold. Wages
in the same period have risen to perhaps 5,000 rubles per
'EIR November 20, 1992

month, and there are many well below this figure. Thus, in
the most optimistic portrayal , with a 5,000 ruble per month
wage, the Russian market, as measured by purchasing power,
is about one-third the size it was in 1985.
This discrepancy between the rise in the price of agricultural
products for human consumption, and other goods-in
this case, those purchased by farmers for the harvest-has
created another serious food problem, threatening to become
a catastrophe. To alleviate this problem, farmers have increased
to the very limit of not only urban consumer market
capacity, but also of refrigerated meat storage capacity, their
sale of livestock, as meat is the best money-maker for the
farmer.
The result in 1992 has been a decimation of herds in
Russia, Ukraine, Belarus, the Baltic republics, and presumably
elsewhere too. By next spring, the size of herds in the
former Soviet Union may be 25% less than one year earlier.
The enforced export of meat, under IMF "export-earning"
conditions familiar earlier in Harvard economist Jeffrey
Sachs's "Polish model," is now sweeping the Baltic republics.
The most tragic case, per capita, is Lithuania, with 3 .5
million people. Lithuania has tried to emulate Estonia and
Latvia, by implementing IMF demands so as to qualify for
loans. The IMF specified, under the demand of "earning a
trade surplus" through exports for hard currency, that livestock
become a prime export. The demand was enforced
through the muscle of a credit embargo which prevented
Lithuania from importing desperately needed feed grain for
its herds . The country was confronted with the cruel choice
that comes from playing IMF "rules of the game": Export the
herds or see them die. Last month, the Lithuanian Agriculture
Ministry was forced to approve the export of 500,000 head
of cattle, including 283,000 dairy cows, 700,000 pigs, and
4 million chickens.
The Oct. 25 devastating electoral defeat of the ruling
Sajudis party and President Landsbergis should serve as a
lesson for the political consequences of bowing to the IMF.
Now, back to the Russian case. What is Russia getting
from the IMF for all these sacrifices and potential mass murder
of parts of its citizenry? The $24 billion that never came
and never will, was reduced to $1 billion which actually
arrived. Nothing else will arrive this year, and for 1993,
anywhere from zero to perhaps a few billion, but only if
shock therapy continues. As for all the other former Soviet
republics, they have, even in nominal terms, received either
zero or next to zero . . . .
While Russia received $1 billion, it is losing up to $15
billion by the end of this year through the unpaid interest
on the former Soviet debt being added to the outstanding
principal, and the drawing on unused parts of former, pre­
August 1991, credit lines. This growth in the former Soviet
debt, from $64 billion at the beginning of this year, to as high
as $80 billion by year's end, is the estimate given earlier this
EIR November 20, 1992
month by Deutsche Bank, which leads the consortium of the
former U .S.S.R.'s private creditors.' . . .
I would like to close with brief teference to three other
examples of IMF shock therapy: former Yugoslavia, the
Czech and Slovak Federated Republic, and Bulgaria, all of
which are , or were, multi-ethnic sodeties in contrast to very
ethnically homogeneous Poland.
Former Yugoslavia
Former Yugoslavia was the original shock therapy "patient"
in eastern Europe, advised by the same Jeffrey Sachs.
It would be wrong to identify IMF shock therapy as the sole
cause of the war in former YugoslaVia, but it was the main
factor making the difference between peaceful separation and
war. Under non-shock therapy conditions, Yugoslavia could
have moved toward a loose confederation, eventually toward
independence for the former constituent republics, but under
an Economic and Customs Union, like a miniature European
Community. Shock therapy ensured war. How?
The answer lies in the West-Ea$t prosperity-poverty divide
that cut through former Yugoslavia, with the more prosperous
western republics of Slovenia and Croatia, and the
poorer eastern republics, of which, Serbia was the largest.
Under shock therapy, Yugoslavia was ruined by the same
hyperinflation that has been destroying Russia nowadays,
and the implementation of IMF demands to stop subsidzing
"unprofitable" enterprises caused unemployment to rise to
more than 2 million, or over 20% iof the work force. The
Yugoslav federal budget was drastically reduced, again under
IMF demands, so that the "war'� between Serbia and the
two western republics of Slovenia and Croatia really started
then, not in July or November 1991:. The Serbian leadership
attempted to compensate for the IMF looting of Yugoslavia
by increasing the taxes and other payments to the Belgrade
center by the richer republics, i.e., an economic rape of
Slovenia and Croatia, to the point where these republics had
everything to lose and nothing to gain by remaining in the
Yugoslav Federation.
What had been before the late i1980s a slow process of
separation, which could have been'orderly, became an avalanche.
There are lessons in this fOri the former Soviet Union
where, even though, in formal terms, the separation into
independent republics has taken place, still through devices
such as the ruble zone and the two-tier system of commodity
pricing, etc., Russia is trying in part to emulate the Serbian
approach, to compensate for its owh shock therapy losses by
looting its neighbors through unfair pricing mechanisms and
other means.
Czech and Slovak Federated Republic
A similar lesson for the former Soviet Union can be seen
in the last days of Czechoslovakia. i Here, shock therapy was
implemented by C.S.F.R. Finance Minister Vaclav Klaus,
though in such a way that the brunt of two years of vicious
Feature 23

austerity fell on the Slovaks. In short, under the Klaus fornlUla,
the IMF was served by keeping the Czech part fairly
stable, through the triage of Slovakia. In the Czech part,
unemployment has been kept below 5%, whereas in Slovakia,
it is at 12% and climbing. Ninety-five percent of all foreign
investment sent into the C.S.F.R. since Jan. 1, 1990
has gone to the Czech area. The triage of Slovakia has created
the economic basis for inter-ethnic conflict within Slovakia,
against its 600,000 Hungarians and other minorities.
Bulgaria
Finally, let me mention Bulgaria, the country which has
been praised by the IMF as representing the model of "success."
The criteria defining "success" are that Bulgaria has
moved in 1992 into a hard currency balance of trade surplus,
and probably a surplus in the non-trade portion of the balance
of payments. These criteria are for the IMF the most important,
as they define a mathematical "capability" to repay
debt. By July 1, 1992, some $1 billion in foreign exchange
reserves, plus $350 million in gold reserves, had been accumulated-these
are the figures provided by the Bulgarian
National Bank report on the Bulgarian economy after the first
half of 1992. In September, Bulgaria announced that it was
resuming debt repayments, suspended in March 1990.
As in the case of the former Soviet Union, the debt of the
communist era was not frozen, but kept growing during the
period of payment suspension, rising from $10.2 billion in
1989 to $12.2 billion this year . .. . On a per capita basis, if
the debt of the former Soviet Union were as high as Bulgaria,
it would total $360 billion.
In the first half of 1992, industrial production fell 23%
and the sale of industrial goods fell by 14.4% compared to
the 1st half of 1991. . . .
By September 1992, unemployment had risen to 530,000
or a 13% rate, compared to 10.1% at the end of 1991, and
only 0.7% in 1990, before shock therapy began . .. .
The country is close to a social explosion, and the prospect
of a winter of hunger has already sparked an attempt at
a mass exodus of the ethnic Turkish minority into Turkey,
an exodus that ended abruptly after Turkey demonstrably
closed its border to its ethnic kinsmen. The closure of the
refuge safety valve for this large minority of 900,000, or
10% of the popUlation, has created the basis for an interethnic
and perhaps, later in this decade, international conflict,
directly attributable to IMF shock therapy.
In conclusion, with the IMF as with communism, success
is based on the ability to rule through an ideology, backed
by the barrel of a gun, or analogous power instruments, such .
as credit and trade embargoes. However, if the absurdity of
a Moscow "center" ruling over a large area of the Earth could
be terminated, then there were no objective reason why the
financial elite of two countries, namely Great Britain and the
U.S.A., should employ the IMF to dictate terms that spell
ruin to 160 sovereign nations.
24 Feature
The LaRouche plan
for economic revival
by Dr. Jonathan Tennrnbaum
i
Dr. Jonathan Tennenbaum, p�sident of the Fusion Energy
Forum in Germany, has drafted development plans for Eurasia,
based on LaRouche's "Productive Triangle" concept.
In Moscow, he presented the m'f!thod behind the programs.
It is perhaps superfluous to observe, that the kinds of radical
economic reforms which the International Monetary Fund is
trying to impose, are leading to disaster. At the same time,
other schemes which are much piscussed these days, including
the so-called Chinese model and various forms of "restorationism"
or "return to the old ways," are not going to work,
either.
The alternative I shall pre$ent is based on the work of
Lyndon LaRouche. It is not a magic formula or an administrative
mechanism falling down ftom the sky, but a method of
thinking about economic and s�ientific problems. Actually,
it is not completely new, but has a long tradition going back
to Leibniz, Hamilton, Carey , jList, and other figures who
were responsible for building up most of the successful industrial
economies in the world. I would add the circles of Count
Sergei Witte and Dmitri Mendeleyev, who were relatively
successful in launching the mqdern industrial development
of Russia beginning in the late nineteenth century. This current
of economic practice continued to be expressed, although
in weakened form, in certain of the policies of French
President Charles de Gaulle and U.S. President John F. Kennedy.
LaRouche has revived the whole conception on a higher
level, while adding new features which are indispensable
for dealing with the present cris�s.
Briefly summarized, LaR

in 1988, that besides Japan, there is only one area of the
world which could be the source or locomotive of a general
economic recovery; that is western Europe, and specifically
the region located approximately in the triangular region between
Paris, Berlin, and Vienna. This region-which he
called the "Productive Triangle"--contains the greatest concentration
of skilled labor and modem capital goods industries
in the world. Extending outward from that region are
natural corridors of industry and transport, reaching throughout
Europe, into the former Soviet Union, all the way to the
Pacific. By building up in the "Triangle" and in these corridors
high-speed rail lines, nuclear energy, and other advanced
technologies, a gigantic increase in productivity
would be generated which would act as a "locomotive" for
the whole world economy. . . .
The fraud of the 'market economy'
The socialist and so-called free market system-which
actually doesn't exist, but is really an ideological cover for
something else-together constitute a two-headed monster,
with the faces of Adam Smith and Karl Marx , such that when
one head dies, the other one dies, too. They both die of the
same congenital illness.
Many people here do not appreciate this point. People
talk here about "transition to a market economy." But there
really is no such thing as a market economy, at least not the
way people seem to talk about it; it never existed, and could
not possibly exist. For example, some experts from Harvard
University come to you here and say, for example, "You
must stop subsidizing industry. " Well, as a matter of fact, the
U. S. government still subsidizes U . S. industry, especially in
areas of high technology. So do the German government and
the French government and the Japanese government, for
tens of billions of dollars a year. These economies could not
possibly function without massive government intervention
into the so-called free market . . . .
The ultimate source of wealth is located uniquely in the
creative potential of individual human minds to make scientific
discoveries, and to assimilate and apply valid discoveries
in the form of new technologies. The result is to increase the
productive powers oflabor, and thereby the potential amount
of physical wealth which can be generated per unit area of
land and per capita of the population, beyond any assignable
limit.
The fundamental question of economics is, how to organize
society in such a way as to constantly increase the density
of successful scientific and technological advance, as a continuous
process. That is the problem which Leibniz, Hamilton,
Carey, List, and LaRouche have answered, in an increasingly
effective manner for practice.
Thus, the discussion about creating a so-called market
economy fails to address the essential point. Yes, the rigid
administrative methods of the Soviet system didn't work.
Yes, there is the problem of the entrenched bureaucracy, of
EIR November 20, 1992
the nomenklatura. Yes, it is useful and necessary to promote
small and medium-sized private centerprises in agriculture
and industry, to establish markets for free access to various
sorts of goods, to reduce wastage ,and inefficiency rampant
in the economy. But, attempts to I solve these problems by
liberalization and administrative methods alone are not going
to work. You need the crucial additional element of physical
change: the rapid injection of imprved technology into your
economy. Without that, you won't be able to effectively
change the structures you complain about. You won't be able
to change the mentality of people.
Noninflationary credit creation
There were three essential problems with the Soviet economy,
in physical terms, which ar� all very closely related.
First was the fact that scientific and technological progress
was "bottled up" within the miliJtary sector, and was not
able to propagate effectively into ,the economy as a whole.
Second, the extreme extensivity of it he economy. Third, there
was a general neglect of intensive use of basic economic
infrastructure.
LaRouche's approach is to attack all these problems simultaneously,
by using rapid improvements in infrastructure
as the transmission belt to propagate technology into the
entire economy. There is a certain analogy to what Count
Witte did with the railroad developments in Russia, and even
to the famous electrification progt1am, which the Bolsheviks
really took over from Witte.
It is crucial to realize that evelry technological improvement
in physical infrastructure irtcreases the effective productivity
of every factory and every farm in the economy,
and reduces the per capita cost df maintaining the population's
living standard.
This has a very important implication: When a National
Bank of Russia, for example, issues credit for physical improvements
in infrastructure, such expansion of credit 1) is
counterbalanced by the production and installation of equipment
and other physical goods �mployed in infrastructure
construction, and 2) increases theloverall physical efficiency
of the economy as the result of mbre efficient infrastructure.
For this reason, issuance of such ¢redit is anti-inflationary in
effect. . . .
Our infrastructure progr�m
The extremely extensive mdde of development of the
former Soviet Union, with its interconnected production areas
spread over immense distances and its very low average
density of population compared with western and central
Europe, translates into very hign transport costs per unit of
goods and per capita. In order for, your economies to operate
as efficiently as the west German or Japanese economies,
for example, your transport and �nergy infrastructure would
need a much higher technological level than Germany's.
Under the present conditions, the greatest intensity of
Feature 25

investment, in tenns of the large projects, must be concentrated
in a system of corridors of relatively highest density of
population and economic activity. . . .
It is crucial to emphasize that our proposal involves nearly
the exact opposite use of infrastructure as, for example,
the BAM [Baikal-Amur Mainline] or the famous railroad to
Vorkuta; these long lines were built in areas of extremely
low popUlation density, and their construction was motivated
by the location of raw materials and by strategic considerations.
Our proposal is not focused on raw materials-which,
as I emphasized, are not the real source of wealth-but with
increasing the productive powers of labor through technology.
We could call this the intensive use of infrastructure, as
opposed to extensive uses . .. .
Let me briefly identify some of the types of technologies
which are crucial for the modernization of basic infrastructure
, particularly within the high-density corridors discussed
above.
First, the introduction of improved fonns of nuclear energy
is absolutely essential. On the basis of recent technological
developments, particularly in high-temperature materials,
it is now possible to build new types of nuclear reactors
which have the feature of intrinsic safety-that is, a dangerous
accident is physically impossible . . . . High-temperature
reactors of this type will provide heat for industrial processes
as well as electricity at a high efficiency, replacing a large
part of the enonnously wasteful consumption of coal and oil
in your economies, and reducing the dependence on transport
of hundreds of tons of fuels over large distances . .. .
Given sufficient energy, many other bottlenecks can be
overcome. For example, we can get a lot of the steel we need
for infrastructure by feeding the millions of tons of junk
which are lying around into high-temperature plasma furnaces
of various kinds. More generally, the higher energydensity
which we can reach in plasmas, pennits us to process
waste and low-quality raw materials economically. We thereby
liberate ourselves from the silly, nineteenth-century obsession
with strategic raw materials, which still dominates
much economic thinking in the East as well as the West. On
the horizon, we have fusion, which the world needs at the
beginning of the next century.
The second crucial area is modernization of the freight
transport system, using high-speed express trains (up to 150
kilometers per hour) with advanced control systems and highly
automated loading facilities for containers. These facilities
make it possible to rapidly transfer containers between the
different modes of ground transport: railroad, truck, and
ship, including inland rivers and waterways. A very big role
in the collapse of the Soviet economy was the lack of sufficient
investment in the railroad system. The role of infrastructure
was not correctly understood.
Technology exists today to build new rail lines and modernize
old ones in a very rapid and efficient manner. There
are now machines which can lay down and weld together
26 Feature
complete railroad tracks at the rate of one kilometer per
day . . . .
We are on the threshold o[,a historic revolution in ground
transport-the use of magnetif:; levitation . . . .
In emphasizing the importance of advanced technologies,
I would suggest a different approach to the much-discussed
conversion of military-rel

amount of speculation and illegal activities of various kinds,
and to stop the present hyperinflation. Essentially, old ruble
notes are exchanged for new currency notes (let us say,
"Novy Ruble") according to an orderly procedure. In this
process, holders of large amounts of old rubles in cash or on
account will be required to account for where they came
from, before they are allowed to exchange them. As a result,
a large amount of rubles acquired illegally, or without paying
taxes, will be discovered or else their owner will burn them
to avoid being prosecuted! . . .
In its simplest form, the new National Bank of Russia
would generate new credit through the emission of new currency
notes in the form of low-interest loans to the state, and
to state and private enterprises either directly or in cooperation
with other banks. The interest rates will be between 2%
and 6%. Most importantly, such loans will be given only for
certain precisely defined categories of productive investments,
including particularly for improvements in infrastructure
and for technological modernization of industry , agriculture,
and the construction sector. But the National Bank will
not provide credit for investments into the service sector or
for purely financial transactions such as trade in commodities
or land . . . .
Let us say that we have a machine-building enterprise
which produces machinery for railroad construction. We receive
a credit from the National Bank of Russia to construct a
new modern production line. The local branch of the National
Bank will pay money out of the special account only for
deliveries of specified materials, machinery, and tools, and
so forth . In other words, we never actually see the money
ourselves . . . .
Naturally, credit will be available outside the National
Bank for the service sector and other uses outside the strictly
productive sector. However, these credits will have a higher
rate of interest, and banks will only be able to lend to such
categories of investment from their own funds . Thus, expansion
of lending for nonproductive activities can only occur
indirectly . . . .
For some people, this method of credit generation to
finance infrastructure and modernization of industry and
agriculture sounds like magic. They are accustomed to
experiencing shortages everywhere, and cannot imagine
anything being created which was not taken away from
another place. But there is no magic. If we look at Russia,
for example, we see on the one side tremendous reserves
of labor, of poorly utilized productive capacity, and especially
an extraordinary technological potential; on the other
side, we see a nearly endless list of tasks, of necessary
things which are not being done, including especially the
modernization of infrastructure. The problem is, that the
capabilities are not properly matched to the tasks, like an
automobile in which the motor is disconnected from the
wheels. What the National Bank essentially does, is to
put them back together.
EIR November 20, 1992
I
How to overcome
• •
errors In economIcs
by Prof. Dr. Taras V. Murdnivsky
Professor Taras Muranivsky teacfes at the Russian State
H umanitarian University and is rector of the new Ukrainian
University in Moscow. He actively brganized the Oct. 30-31
conference on "Alternative Apprqaches to Economic Reform,"
and served as its co-chair. Professor Muranivsky is
scientific editor of the forthcoming Russian edition of Lyndon
LaRouche's 1984 book, So, You Wish to Learn All About
Economics? His paper on that bookt, preparedfor the conference
but not delivered for reasons of time, is part of the
conference proceedings and is in�luded here in full. The
speech has been translated from tlie Russian, and subheads
have been added.
In Russia, as in the majority of the new independent states
that arose after the disintegration of the former U.S.S.R., an
attempt is being made to achieve th¢ economic level observed
in the developed countries of the West today, by means of
private property , the market, and c�rtain financial and pricing
operations. But the problem is tha� our notions about the socalled
market economy are oversirrtplified to no small degree,
are somewhat "larded" with the idejologies of the recent past,
and are essentially mythical. It see!ms to bother us little, that
among countries that have private property and a market,
there are economically backward and politically dependent
ones alongside the developed.
Evidently those people are correct, who compare contemporary
Russia, for example, wit" Brazil. Just as they are
there, we are faced with a compra

tical experience of running an economy rationally.
Among the scientific conceptions unfamiliar to a broad
circle of our specialists are the views of the major American
scholar, economist, and public figure, Lyndon H. LaRouche.
Considering that one of his books, which came out over a
decade ago , was entitled Imperialism, the Final Stage of
Bolshevism, it is not difficult to understand the reasons for
official Soviet economic science's negative attitude toward
him. He was tagged with all sorts of labels and accused of
all sorts of sins. Unfortunately, in some places the inertia of
The most serious obstacle to
economic transformations in Russia
and the other newly independent
states is the Bolshevik way Q{
thinking, which permeates society
fro m bottom to top. People are upset
right now, because prices have risen
catastrophically. But nobody is upset,
that we are producing very little and,
where we are producing, not what is
needed.
such "exposes" has been preserved up to the present.
Let us try calmly to examine the views of this scholar.
We will be assisted by the just-finished translation of L.H.
LaRouche's book into Russian. It has a somewhat convoluted
title: So, You Wish to Learn All About Economics? As the
scientific editor, I proposed to give it a more precise title,
How to Overcome Errors in Economics. This would have
expressed the main idea of the book and its urgency for our
readers . But, unfortunately, German and American scholars
from the Schiller Institute decided to keep an almost literal
translation of its English title.
One may accept the author's views or disagree with him,
but it would be a profound error to ignore such a serious and
multi-faceted body of scientific investigation. All the more
so, in that LaRouche takes a very non-traditional approach
to the development of economic science and gives non-trivial
evaluations both of economic practice and of state policy in
the economic and social spheres.
Economics as 'natural science'
In my view, the methodological aspects of his substantiation
of the formation and development of economic science
and his identification of its essential character as a natural
science, including a fundamentally new treatment of several
key concepts and categories, are of great theoretical interest.
We know that Academician Landau subdivided all sci-
28 Feature
ences into two groups: natural, and unnatural. LaRouche has
his own classification, which is also unusual for us. Above
all, he distinguishes the natural sciences, which include biology,
economic science, and mathematics itself, as well as
the history and investigation of new manifolds. But he rejects
the necessity of conducting scientific research in such areas
as "psychology, sociology, anthI1opology, and kindred '010gies'
of so-called 'social' science." Such a categorical condemnation
is unjustified, I think, since it is indeed necessary
to study the social sphere. Everything depends on what methods
are employed and to what extent science is independent
from politics and ideology. I
The author himself examines! a broad spectrum of social
problems. Most valuable from a practical point of view is his
frank and comprehensive analysis of the system of social
relations in western countries (economic ones, first and foremost),
which people in our country often look at as some
kind of ideal, or as the latest version of "the shining future."
It is important to note, however � that the author makes his
critical analysis of that system not from Marxist or from
other class, race, or party positions, but from a profoundly
scientific standpoint.
With respect to its scientific content, there are at least
three aspects of LaRouche's book that impress me: the creative
character of his analysis of various processes and phenomena;
the consideration of science as an organic whole,
and of the interaction of its various branches; and the logical
consistency and historical continuity in the presentation of
the theoretical conception chosen by the author.
Hypothesis of the Higher liIypothesis
As the fundamental scientific research method,
LaRouche chose the principle called by Plato the Hypothesis
of the Higher Hypothesis. Chapt¢r 5 of the book, almost in
its entirety, is devoted to this methpd. The author emphasizes
that an investigation begins when some existing conception
is subjected to doubt, and subsequently may be refuted.
The researcher experiences such doubts, when he "is
annoyed by a noticeable smell of falsehood or superficiality"
in some scientific axiom or doctrine. The researcher attempts
to discern, in what state of mind such a doctrine or conception
would have been advanced and elaborated, and what false
assumption underlay its formulation. It is especially important
to establish, how it is contrruy to the lawful ordering of
the universe.
Then a blow has to be struck against the "Achilles' heel"
of the conception that has been cast into doubt. Here, neither
intuition nor any feeling like that Will help. The goal that has
been set can only be reached on the basis of and by means of
comprehensive knowledge and deep understanding of the
problem. LaRouche demonstrates these qualities with the
example of his own investigation.
A characteristic example is his comparison of two views
of the problem of the derivation of words: that of the famous
Sanskrit philologist Panini, who argued that all words derive
EtR November 20, 1992

from the verb, and that of the well-known ancient Greek
philosopher Aristotle, who asserted that nouns were primary.
Using the methods of Plato, Kepler, and Riemann, and certain
specifics of the development of science, LaRouche criticizes
the position of the Aristotelians, for whom "science is
stringing imaginary self-evident things, like beads on a
string, on the latticework of a nominalist's deductive-theorems
or, similarly, chopping small things into ever-smaller
constituent things."
At the same time, the author argues that any empirical
fact, described from the standpoint of the transitive verb ,
defines a corresponding transformation, which occurs during
a given time, in a given place. An in-depth analysis of this
problem brings LaRouche to the conclusion, that "physical
has the meaning of transformation (as opposed to static,
particular existence instantaneously). Transformation exists
only in finite time and finite spatial displacement. Hence,
neither matter, nor space, nor time can be separated as existing
independently of the other two. Matter in itself, space
by itself, and time in itself, are meaningless constructs of a
deluded mind. Only physical space-time exists."
Thus, from the standpoint of transitive verbs, the author
reaches philosophical generalizations, from which follow
new evaluations and conclusions of a universal character,
such as, "The universe created itself as a continuing process
of negentropic self-transformation."
LaRouche subjects the laws ofthermodynamics to devastating
criticism, especially the second principle, entropy. He
considers the second law of thermodynamics to have been
refuted in advance by the work of Kepler, published in the
early seventeenth century. And Kepler's astronomical laws,
discovered by him on the basis of arguments and calculations
based on the Golden Section principles of Pacioli and Leonardo
da Vinci, were of decisive significance. Later, Gauss
proved the universal character of Kepler's laws, from which
it follows that the universe as a whole is essentially negentropic.
The author conducts his analysis of these and other researches
in the history of science, in order to prove the unity
of science and the universal, general scientific significance
of the most important scientific discoveries, regardless of
what area they were made in.
The heritage of Leibniz
Thus, mathematical conceptions (synthetic geometry,
the ontological transfinite, and others) directly affected economic
science. LaRouche considers G. Leibniz to have been
the founder of the new tendency in this field.
Based on the research methods employed by G. Leibniz
in the area of heat-powered machines, Lyndon LaRouche has
formulated the principles and methods of physical economy,
whose subject-matter is the functional dependency between
the perfection of productive processes (improvements in machinery
and technology of production) and the growth of the
productive power of operatives in production.
EIR November 20, 1992
The essence of physical econonlly, it appears, may be
understood from the interconnection between energy and
economic systems.
An important indicator identified by LaRouche for the
analysis of technological systems is the concept of energy
flux-density . Analyzing this flux and the losses of energy in
the process of work by the machine fCd by that energy, made
it possible to discover new phenomena. Of greatest interest
is the conclusion, based on observati

compared the benefits .derived from the work of these machines,
with the cost of mining the coal. This approach served
as the point of departure for Leibniz in creating a new economic
science. He saw the purpose of heat-powered machines
in that, by using them, each operative could perform
the same volumes of work , which it required whole groups
of workers to do without those machines. These indicators
of the economy of labor are compared with the cost of the
machines and the coal they consume, including the cost of
mining, transporting, and utilizing the coal.
An important step on the path qf
establishing a new economic theory
will be to introduce a special course
in physical economy, as a special
subject qf study at the Ukrainian
University in Moscow. This and other
books by LaRouche will be used as
textbooksJor students and graduate
students qf the university.
The study of differences in the productivity of various
types of machines, using the same quantity of energy, is
important in physical economy.
Lyndon LaRouche writes about his own contribution to
the development of economic science, that he was the first
to realize the importance of Riemann's contributions in mathematical
physics, for the quantification of the relationship
between rates of technological progress, and the consequent
growth of intensivity of economic development. This was
the origin of the LaRouche-Riemann method. Furthermore,
economic investigations intersected the most promising directions
of research in the field of controlled thermonuclear
fusion and plasma physics.
Economy of labor
The American economist Henry Carey, whom LaRouche
cites, proposed to measure the value of man's productive
activity, by the growth of the economy of labor, which is
achieved through technological progress.
This interpretation differs from the Marxist definition of
value with which we are familiar, in that value is attributed
not to the object (commodity, for example), but to the process
(productive activity). This is a new definition of the category
of value, one conditioned by technological progress, on
which economic progress depends. The economy of labor is
impossible, without technological progress.
The growth of man's mastery over nature is easy to measure
, with the indicator ofthe reduction ofthe area of inhabit-
30 Feature
able land, required to maintain the life of one average individual.
This is an effective way of measuring the economy of
labor. LaRouche terms this .measure population density,
which is defined by the number of people per square kilometer,
able to subsist by means of their own labor. In practice,
this expresses the level of tecllnology in a given society.
The indicator to be measUred is the rate of growth of
population density. In this way, LaRouche proposes to measure
the rate of growth of economy of labor, at which growth
of the productive power of labbr occurs.
Calculation of the magnitlilde of the economic category
of value is based on this. Its nreasure is the rate of growth of
potential relative population density, in comparison with its
existing level.
In mathematical terms , this definition of value may be
precisely expressed, using C. Gauss's functions of a complex
variable.
No 'post-industrial socittty'
This is why the Leitmotiv o£ LaRouche's book is a protest
against all sorts of proposals to reduce the rate of technological
progress. I
LaRouche harshly criticize$ the policy ofthe "post-industrial
society," which, due to tbe decline of the productivity
of labor, expressed as a reduced output of physical goods,
will lead during the next 40-50 years to a chain reaction of
outbreaks of famine, epidemic$, and the death of around 4.5
billion people in the world, as well as a fall in potential
relative population density.
The "post-industrial society" policy began to be implemented
in the U.S.A. in the mid- 1960s. LaRouche terms
Zbigniew Brzezinski's well-hown theses on the "technetronic
society" a reflection of the linkage between the utopian
strategic thinking of American Presidents beginning with
Lyndon Johnson, and social and economic policy.
LaRouche identifies the H�ard Business School, working
along lines charted by Robert McNamara of Ford Motor
Co. and the Pentagon, as a cent¢r that influenced the transformation
of industrial management philosophy. The idea of
"buy cheap, sell dear," became a doctrine of economic
science.
To dress this doctrine up in a scientific costume, ideas
were used from the book Mathtmatical Economics by John
von Neumann (1903-57). The phrase "opportunity cost" attained
magical popUlarity. LaRouche thinks that the philosophical
views of von Neumanniare close to those of Laplace ,
Clausius, Helmholtz, and Bol1izmann. Worst of all , in his
view, was the application of von Neumann's theory of games
to economic processes, which were thereby reduced to solutions
of systems of linear ineq\lalities. The notion that the
economy was in a state of zero technological growth and that
tendencies of the technological level to fall could be ignored,
was most absurd.
LaRouche also holds that a Gaussian synthetic-geometrical
interpretation of negentropy suffices for "rejecting the
EIR November 20, 1992

incompetent Wiener-Shannon 'information theory' dogma ."
Analysis of the mathematical conceptions that influenced
the development of economic science led the author to the
conclusion, that the basic principles of such contemporary
scientific fields as econometrics, operations research, and
systems analysis are "consistent failures." I am not prepared
to accept this conclusion "on faith," without special studies
to back it up. But a comprehensive analysis of these areas
would go beyond the framework of economic science and
would require serious, complex research.
The science-driver
LaRouche advocates an economic policy of rapid growth
in the economy of labor, on the basis of a science-dri\::er for
the economy. This requires political methods that stimulate
mutual understanding between scientists and leaders of the
economy.
For the next 50 years, the author considers three areas of
fundamental research to be the most promising:
1) Controlled plasmas with a very high energy flux-densi­
ty, obtained in experiments on thermonuclear fusion as the
main energy source for mankind.
2) A related problem-the development of coherent radi­
ation with a high energy flux-density, considered as a means
of production and an implement for other applications. This
area is represented by work on improving lasers and on parti­
cle beam experiments.
3) New directions toward a fundamental breakthrough in
biology, a very important feature of which, though not the
only one, will be achievements in microbiotechnology.
The author's proposed classification of various types of
expenditures on social production, from the standpoint of
their role in making up the national income, is of great theo­
retical and practical interest.
According to LaRouche, the essence of the economic
category of value is the transmission of negentropy to the
economy and to society as a whole, by means of productive
activity. But the decisive role is played by the participation
of scientists and specialists in transferring negentropy from
science to production.
LaRouche in Russia
Let us suppose, that LaRouche's ideas will find partisans
among influential economists and governing circles in Rus­
sia. Will they be able to be implemented swiftly? I think that
we have an array of obstacles to this.
Above all, our poverty, against the backdrop of western
abundance, creates the illusion that we should not seek any­
thing new, but just skillfully copy the experience of the devel­
oped countries.
Another serious obstacle is the weak theoretical training
of economists in our country. For decades, former Soviet
students and graduate students had no opportunity to study
any economic conceptions other than Marxist-Leninist ones.
Now the situation is changing, and it has become possible to
EIR November 20 , 1992
get acquainted with the conception$ . of LaRouche and other
views , but time is required to maste r them.
Unfortunately, many constructive proposals contained in
this book have not been carried ou� in practice. Therefore it
is entirely possible that objection� will arise, that Russia
would become a "test range" fo. the latest experiments
thought up in the West. I
And there will also be those who discern a superficial
resemblance between LaRouche's ; conception and Marxist
principles, with respect to state reg,lation of production, for
example, and the preferential attituclle to the growth of means
of production over mass consume � goods. But really, there
are essential differences here.
,
While Marxism rejects privat¢ property ownership as
such, in LaRouche's conception, "the basic productive func­
tions remain the prerogative of pqvate investment." While
in Marxist political economy, the b.sic branches of industrial
production are subjected to planhed regulation, physical
economy leaves to the governmenk chiefly the functions of
maintaining basic areas of productiye infrastructure and utili­
ties, such as water supply, transport (ports, railroads, high­
ways, airports) , production and diStribution of electric pow­
er, the development and managM utilization of natural
resources, and urban infr!l$tructure� including basic services.
The most serious obstacle to economic transformations
in Russia and the other newly inddpendent states is the Bol­
shevik way of thinking, which permeates society from bot­
tom to top. People are upset right now, because prices have
risen catastrophically. But nobody! is upset, that we are pro­
ducing very little and, where we are producing, not what is
needed. At the top, people are stiU convinced that it is possi­
ble on such-and-such a date to introduce a market, or to ban
atomic power stations (which are !continuing not only to be
used, but to be built, around the world).
Society's life depends to a signtficant degree on the devel­
opment of economic science. During the years of totalitarian­
ism in our country, many scienc�s suffered a mortal blow.
But while, say, cybernetics or genetics have begun to make
up for what they lost rather intensi�ely, this has not occurred
with economics. The "generals" !of economic science and
the collectives they headed spent decades giving a scientific
glaze to party slogans and resolutions.
As a result, economic scienqe lost the most important
characteristics and methodological principles, which are inherent
in any normal science, whose goal is to seek the truth.
LaRouche's book, in my view, imakes an important step
for economic science to acquire �is quality. This makes it
possible to overcome deep errors, both in economic research,
and in the practice of running an economy.
An important step on the path1 of establishing a new eco­
nomic theory will be to introduce It special course in physical
economy, as a special subject of study at the Ukrainian Uni­
versity in Moscow. This and othJr books by LaRouche will
be used as textbooks for students and graduate students of
the university.
Feature 31

�TIillInternational
Freeing of Jordanian will
set back British gameplan
by Muriel Mirak-Weissbach
On Nov. 10, Laith Shubeilat, the popular Islamic parliamentarian
in Jordan, was sentenced to 20 years hard labor, commuted
from the death sentence. The military court had pronounced
him, another parliamentarian, and two shopkeepers
guilty of illegal weapons possession , and conspiring to overthrow
the state in order to establish an Islamic dictatorship,
with Iranian backing. Two days later, the news was leaked
to AP in Amman that Shubeilat and his co-defendent Yacoub
Qarrash, would be freed by His Majesty King Hussein. It
was expected that the surprising announcement would be
made on the occasion of the monarch's birthday, Nov. 14.
In the best hypothesis, the king's act would be not a pardon,
but a declaration of the charges as null and void, and the
subsequent restoration of Shubeilat to his parliamentarian
dignity.
How is such a fairy-tale ending possible in this day and
age? What are the implications for Jordan , for the Middle
East, and relations with the Great Powers?
From the arrest of Shubeilat in late August, U.S. statesman
Lyndon LaRouche had hypothesized that the case were
the leading edge of a broader assault on the part of the Anglo­
American establishment (and Israel) against the Hashemite
Kingdom. LaRouche viewed it as the lever for effecting a
strategic shift in the region, which would aim at forcing
Jordan to accept a U.S.-brokered separate peace with Israel,
and tum its back on Baghdad, which it had supported-in
virtual isolation--during the Persian Gulf war. Shubeilat was
to be sacrificed because he embodied the opposition to a
second Camp David separate peace treaty with Israel, and
because he stood up for Jordanian sovereignty against the
supranational dictates of the International Monetary Fund
(IMF) and Bush's new world order. Shubeilat was a particularly
appetizing target for Washington and London because
32 International
he had openly endorsed the PQlicies and presidential ambitions
of Lyndon LaRouche. As a respected independent of the
Islamic movement, Shubeilat reflected the growing political
power of the Muslims, not only in Jordan, but in Algeria,
Sudan, Egypt, and elsewhere. Smashing him would signal a
crackdown everywhere. According to Anglo-American scenarios,
the act of sacrificing the popular Shubeilat could unleash
massive unrest, triggering chaos in Jordan and even
war.
Sometime in August, as Shubeilat was completing his
parliamentary commission's PlI"obe into corruption in high
places (including past ministries), the order went out from
the United States and London to nab him. He was arrested
on Aug. 31. As it was leaked by the Paris daily Le Monde
just recently, it was just prior to that date, on Aug. 22, that
the Israelis managed to get the 'Jordanian peace negotiators
to initial an agreement on an agenda, which was to lead to a
peace treaty. The significance of the document for the Israelis
was symbolic: They consider it a sign of capitulation. This
agreement was engineered, significantly, in the absence of
the king, who was in the UnitedlStates for cancer surgery.
No evidence; witness rec�nts
The legal case bore all the markings of a classical frameup,
as we have chronicled during October. Since the state
security prosecutor running the ,trial in a military court had
no evidence, it had recourse to a dangerous ruse, a "secret
witness" introduced in "secret, closed session." The witness,
presented as a Syrian businessman, "Yassin Ramadan AI­
Yassin," provided damaging testimony against Shubeilat; he
said he had carried 300,000 deutschemarks ($200,000) from
the Iranian government in Teheran to Amman for Shubeilat.
This would prove that Iran backed the conspiracy to over-
EIR November 20, 1992

throw the state. Shubeilat's defense lawyers abandoned the
case in legitimate protest against such outrageously fraudulent
tactics, and the accused started a hunger strike. With a
court-appointed lawyer whose defense he rejected, Shubeilat
sat through the remaining sessions, until the trial ended Oct.
30.
On Nov. 6, a man named Ali Shakarchi contacted the
offices of the Schiller Institute in Germany, with a bizarre
tale. He said he was an Iraqi-born German citizen, who had
been lured to Amman and coerced into providing false testimony
against Shubeilat. He was the real "Yassin. Ramadan
AI-Yassin" and, having safely returned home from a wild
adventure, wanted to tell the real story. The Schiller Institute
had been mobilizing for Shubeilat's freedom since early September,
and had generated protest telegrams, petitions, and
inquiries from parliamentarians, trade unionists, political
and religious figures throughout Europe, the United States,
and Ibero-America. All these messages had reached Jordan.
A representative of the Schiller Institute had attended court
sessions with French lawyer Claude Pernet in the first week
of the trial, as observers.
Shakarchi's story (see affidavit) is an incredible account
of how secret services function to frame up people. Once his
version had been certified by a lawyer, the affidavit was
presented to the German government (considering his citizenship)
and to the Jordanian authorities. The German Foreign
Ministry, incredibly, refused to accept it, explaining
later that it did not want to be "involved." In Jordan, the
affidavit circulated among the top political elites and selected
press. Abroad, in Europe and other Arab countries, the news
of it spread like wildfire. The most damning information
contained in the affidavit was Shakarchi's charge that the
persons who had coerced his false testimony were the very
same persons running the trial: the state prosecutor, the
judge, and secret service agents. Furthermore, he named by
name the highest military judicial authority, the Attorney
General.
Thus, when Prosecutor Hijazi and Judge Lt. Col. Y ousef
Faouri convened on Nov. 10 to deliver the verdict and sentences,
they were fully aware of what had transpired. The judge
commuted the death sentence to 20 years. Furthermore, he
found Shubeilat not guilty of certain charges, such as undermining
relations with Iraq, or slandering the king. He
was found "not responsible" for instigating insurrection or
slandering parliament. Regarding the convictions, the only
"proof' the judge had was what was contained in statements
made in testimonies of the third and fourth defendants, two
shopkeepers named Ayoubi and Idkedek, who had confessed
to weapons possession; during heavy interrogation, they had
implicated Qarrash as a leader of the conspiratorial organization,
and only indirectly mentioned Shubeilat, though never
having had contact with him. For example, a document
which Judge Faouri referred to, outlining the alleged conspiratorial
organization's internal policy and structure, was, ac-
EIR November 20, 1992
c;ording to the same two confessed �efendants , "dictated" by
Qarrash, but "probably inspired" b� Shubeilat.
Most surprising in the sentencin� was what the judge had
to say about "Yassin Ramadan Al-Yassin." Suddenly the
man who had been the crown witnQss was no longer useful!
Faouri said he was not accepting ths testimony because of
his "lack of credibility" and the impossibility of verifying
what the "Syrian businessman" reported. Evidently, Faouri
and Hizaji were trying to control th¢ massive damage done.
Unfortunately for them, one d� following the sentencing,
a major European paper, Le Monde, broke the story of
the Shakarchi affidavit. The ftoodglates were opened. Many
other leading media were ready to follow suit, some willing
to publish the entire affidavit.
And one day after that, the ne't's of the king's decision
to free Shubeilat was leaked. Insiders reported that a key role
had been played by Speaker of th� Parliament Abdul Lattif
Arabiyat, who made public his intention to call on Prime
Minister Sharif Zeid Ben Shaker to order a retrial. Many
parliamentarians of different polit�cal tendencies protested
the verdict. The prime minister has the power to augment or
reduce the sentence, or order a retlial . The government can
propose a general pardon, which, ijf endorsed by Parliament
and approved by the king, would �estore Shubeilat and his
co-defendant to their parliamentary seats.
What will happen in Jordan now?
The best outcome would be the! full restoration of parliamentary
dignity to Shubeilat. Thf king, who is beloved,
would only gain support from his p4ople. Furthermore, it will
be important, as Muslim Brother�ood bloc parliamentarian
Ibrahim Khreisat stated, to dispel _he fear engendered in the
country as a result of the trial. It became obvious to every
citizen that if such charges could be made against a parliamentarian
of Shubeilat's stature, M one was safe. In addition,
the fact that the military court accepted illegally tapped
phone conversations as court admissible evidence, threw the
entire population into paranoia, as everyone feared his phone
might be bugged.
What must come out i
To dispel all fears , and restor� confidence in the institutions,
the whole true story behiml the Shakarchi affair will
have to be told. This means that s¢veral questions will have
to be answered. First, who are an the players in the drama?
Locally, they appear to be contlltminated elements of the
military and secret services, popul�rly known as the "Mafia,"
known to oppose the king's democratization plans and to
challenge his authority. It can be 4xpected that many will be
removed from their positions, as i they obviously constitute
a threat to the democratization process inaugurated in the
country. Secondly, who are their partners abroad? The consistent
references in the trial to I Syrian and Israeli inputs
provide good leads: The secret wi.ness was provided with an
apparently authentic Syrian passport and identity; the prose-
International 33

cution cited Syrian law as its precedent for allowing tapped
telephone conversations as evidence, and so on . Israel was
even more important. The first key witness for the prosecution
was one of two brothers , serving a prison term as a
convicted Israeli spy. Under oath , he retracted his written
deposition (incriminating Shubeilat) and confessed that he
had been offered a reduced jail term if he would perjure
himself. Finally, what · is the significance of the attempt to
blame the alleged conspiracy on Iran? It fits like a glove into
the buildup of press propaganda in the West regarding the
emergence bf a new threat in the region.
If the full truth is found, it can lead to a very healthy
process of clearing the air of those elements which are truly
plotting to undermine 'Jordan's sovereignty from abraod.
There are tumultuous upheavals rocking the elites in Great
Britain and in America's lame duck administration at present;
it is precisely in this process that earnest investigations into
the "Great Powers' " role in the Shubeilat frameup can yield
important discoveries.
Documentation
Text of the
Ali Shakarchi affidavit
Thefollowing affidavit was made on Nov. 6 by Ali Shakarchi,
who admitted that he had been coerced into giving false
testimony on Oct. 17 against Laith Shubeilat.
Having been informed of the possibility of legal prosecution
in case of falsely or not fully delivered statements in an
affidavit, [and] also having been notified of the possibility
that my written statement could be used in front of a German
or foreign court, I herewith declare in lieu of an oath:
L Regarding my person:
Name: Ali Shakarchi
Date of birth: 111145
. Place of birth: Nasiriyah
Profession: Car dealer
'Family status: Married, 2 children
Citizenship: German
II. Regarding the Case:
On Oct. 8, 1992 I received a call from Amman at my
residence in Munich. The caller presented himself as a high
official of the Jordanian Royal Palace of King Hussein. He
34 International
gave his name as Hafez Amin. He told me that the king
wanted to make my acquaintance. When asked, the caller
replied that he had heard of me from a Dr. Galeb who had
told him that I had been in Iqm. He, Mr. Amin, was in
possession of a certain picture. He said I probably knew the
person in the picture and therefbre he asked me to come to
Amman to look at the picture ahd to tell the king if I knew
the man or not.
I
I was very disturbed and ask�d again how he came to call
me. He repeated that he had got !my name from my friend.
Later that evening Mr. Amin called me again. He told
me that a ticket was ready for ime at the Royal Jordanian
Airline counter at the airport. Iti was a first-class ticket. My
stay in Amman would only be ! for one or two days and I
would return safely.
I agreed with these terms, btlt told him that I would only
fly the day after tomorrow.
On Oct. 13, 1992, I flew fni)m Munich to Frankfurt, to
fly from there to Amman. I had picked up my round trip
ticket Munich-Frankftirt-Ammai:t at the counter [of Royal
Jordanian] at the Munich airport. As I took my seat on the
plane in Frankfurt I noticed sittiJilg next to me a well-known
German nuclear physicist (smalll well-fed, with glasses and
a moustache). I knew him from His TV appearances from the
time of the Gulf war when he had been often in Baghdad on
certain missions.
Suddenly I realized that my wallet was missing. Probably
I had left it somewhere while doing some shopping. In the
purse I had around 18,000 deut�chemarks. I left the plane
and asked in the office for lost o/j>jects. I also inquired at the
office of Royal Jordanian. When I was at the office of the
airline a Mr. Abu Haithem happened to call in. I did not
know him, but he must have been a high official of the Palace
or the prime minister. He had called there to inquire if I had
actually flown off to Amman. The secretary of the airline
told him, that I was still in Frankfurt and put me on with Mr.
Abu Haithem. I told him about my lost wallet. Mr. Haithem
told me that they would reimburse me and that I should fly
to Amman.
i
I did not want to fly to Amman with empty pockets. So I
flew back to Munich. That same evening I received a call
from Mr. Amin who asked me why I had not flown to Amman.
I told him the reasons. Mr. iAmin said I should at least
fly the next day. He said it was vtry important. He swore by
the head of King Hussein that I ¢ould go back immediately
and that my passport would not be stamped and that I would
not have any difficulties. At this point I would like to explain
that such an oath means a lot to al!l Arab .
On Oct. 14, 1992, the next daly, I flew to Frankfurt again
to go to Amman from there . Mr. Amin was very nervous and
telephoned repeatedly to the airliIJie to inquire if I had actually
boarded the plane to Amman. This was reported to me later
in Jordan .
At my arrival in Amman I w�s picked up at the airport
EIR November 20 , 1992

Anmesty International sees
'nothing blatantly unfair'
Another head that may roll as a result of the developments
in the Shubejlat case is that of the murky "human rights"
outfit known as Amnesty International. The day before
Laith Shubeilat, Jordanian Member of Parliament and
head of the Commission on Public Corruption of the Jordanian
Parliament, was condemned to 20 years hard labor,
a Jordan-sector Amnesty International spokesman in Lon- .
don, named "Claudio," found "nothing blatantly unfair"
about the proceedings, and "nothing which could justify
cal1ing the trial a farce." For example, he pointed out
that the prosecutor had not referred at all, in his final
peroration, to the fact that the star prosecution witness
had been a secret witness, with a false identity! As though
the recourse to such means in order to obtain a guilty
verdict, were not enough, by itself, to taint the entire
proceedings.
When "Claudio" was told of the story circulating that
the anonymous witness was a false witness, and when
asked what he would say if an affidavit to this effect by
the false witness existed, "Claudio" spluttered that this
by a man with a white moustache, bald head, blue eyes, slim,
and around 50 years old. I thought it was Mr. Hafez Amin.
But the gentleman told me that Mr. Amin was still on his
way to the airport.
Several men with walkie-talkies took me to the special
VIP lounge, normally reserved for the welcome ceremony
of high-ranking guests. I was treated in a very polite manner.
We then left the airport and after about 10 minutes a
Mercedes arrived. In this car were a Mr. Mohammed Hijazi,
the State Attorney in the trial as I learned later, and a Mr.
Abu Hashim, a man of the Secret Service, as I also later
learned. They were in plainclothes.
They took me to a villa outside of Amman in the suburb
called Sweleh.
On the table in the villa were two albums, a red one and
a black one. In one of them was a huge picture of Laith
Shubeilat and another one of Mr. Qarrash. I was asked if I
knew these people. I told them that I did not.
In the following encounter I was asked by every one of
the people present again and again-I was pushed-to look
at the pictures very carefully and to think very carefully if I
did not know the respective persons or if I had not met them
somehow in Teheran. I declared again and again that I neither
knew these people nor had ever met them before in my life.
After I had answered these questions in this clear way,
EIR November 20, 1992
might just dent the credibility of the prosecution and the
court.
According to sources in the El ropean Parliament,
Amnesty International had warned c Bers from the I;uro­
t�
pean Parliament inquiring about the al ' tha� "there might.
be substance:: to the allegaJion that S ubeilat �as a terror
ist! Amnesty.'s blanket statement .t t the trial �as fair
was cited by German ministers, in etters responding to Ii
inquiries, as a guarantee. , ;
At the beginning of October. I n M�in, secretary.i .
general of Amnesty International, isited' Jordan for a
week, and popped into the Squbeilat tpal one day . Amnes­
ty refused to issue �tatements on the frial.
Amnesty International js notoriqus in Great. Britain ,
Wt.. Guildford F?ur cases of Irishmen 0
the state where it is based and whose in�erests itrepresents,
for refusing to touch ti;le Birrnidgham Six andf,the ,
.
It)
had been ft:alJle.d
by British security forces. Most da ing is the fact tl!at
Amnesty has consistently refuse to look into the
LaRouche case. On the latter, spokesmen for the Ameri­
cas Desk of �mnesty tol� EIR tha� �h¥ ?r�a?ization "nev­
er has anythmg to do wIth conditloqs In JaIls," that they +
had "no information whatsoever" on the case-an outright ·i.
lie-and that they believed Mr. LaRj.
uche to be a common
criminal .
Mr. Abu Hashim suddenly changedlthe subject and told me
that I was of Iraqi origin and that fie had heard that I was
against Saddam Hussein and that I I had connections to the
Iraqi opposition. At this moment it ecame clear to me that
I had run into a trap . I felt that I had two possibilities, either
to do everything that was asked of me in the hope that I could
return to my family in Germany, or to have made a journey
without return . I had to take into account that Mr. Amin in
the telephone conversation with me in Munich had sworn by
the head of the king. I knew that this l oath was false. An Arab
who misuses such an oath is capable of anything, as I know.
Also it became clear that I was not/to see the king as l had
been told in the telephone call in Munich.
My fear grew significantly as I rhOUght of my wife and
my children. I thought for a momen of fleeing, but then saw
no possibilities for escape. The onl way out that I saw was
to play along with the game and to 10 what I was told to do.
I eventually agreed to behave as I was ordered to do.
After my consent, the conversation was eoded at this
point and adjourned to the evening. In the evening I was
picked up and taken to the office of the Military Court, Alqadaa
Alaskari .
I was taken to the room of Mr. Hafez Amin. I was told I
the judge, Yousef Faouri, would come soon.
After about 10 minutes Mr. F�ouri arrived. He was in
International 35

In memory: Indira Gandhi, 19 1 7-84
November 19 marks the 75th anniversary of the birth of
Mrs. Indira Gandhi, world leader and prime minister of
India, who was brutally gunned down in her garden by
two Sikh bodyguards on Oct. 31, 1984. Little does the
world know the enormous vacuum of leadership that her
death has left in the world today.
Indira Gandhi was born into the independence movement
for India against the British empire, that was being
led by Mohandas K. Gandhi, her father Jawaharlal N.ehru,
and her grandfather Motilal Nehru . As a youth, she read
the play about Joan of Arc, The Virgin of Orleans, by the
German poet Friedrich Schiller, and determined that the
young maid of Orleans would be her inspiration to save
her own nation, India.
This, Mrs. Gandhi accomplished. Mrs . Gandhi was
prime minister of India from 1966 to 1977 and again from
1980 to her death in 1984. In those years , her selfless
devotion to her nation, which she placed above all other
concerns throughout her life, enabled her to steer the ship
of state of a nation of 700 million people. After a famine
of 1966-67, Mrs. Gandhi determined that India must end
its dependency on U.S. PL-480 food shipments, which
always carried the threat of political blackmail with them.
India would become food self-sufficient, in defiance of
the mal thus ian claim that an independent India was destined
for famine and starvation. Through the work of
agronomist C. S. Subramaniam and the Green Revolution,
India had achieved this goal by the end of the 1960s.
In 1974, India detonated a peaceful nuclear explosion
for a dam-building project, thus signaling to the world
that India has a nuclear capability.
From this position of strength, Indira Gandhi gave India
the ability to carry out an independent foreign policy,
and in the last years of her life, she was seeking to vastly
improve relations with the United States to balance its longstanding
relations with the Soviet Union.
At the time of her death, Mrs . Gandhi was a world
plainclothes and he welcomed me. At this point the following
persons were present besides Mr. Faouri and myself: Mr.
Hafez Amin, Mr. Mohammed Hijazi and Mr. Abu Hashim
and two more persons in uniforms.
The judge, the State Attorney and the Secret Service
officer discussed what kind of passport I should get. They
agreed on a Syrian and that I was supposed to have been born
in Dir Alzur. This town is situated in Syria near the border
to Iraq. The decision was motivated by my Iraqi dialect.
36 International
leader, the premier spokesman
ty-stricken millions of the (lp'",PI.nn.
ing in the footsteps of her , a founder of the Non­
Aligned Movement, she was its undisputed leader at the
time of the March 1983 summit New Delhi.
"Non-alignment is national
dom," Mrs. Gandhi said in her
stands for peace and the a
aims at keeping away from mil
equality among nations and the
national relations, economic political."
Then, Mrs. Gandhi threw the gauntlet to the
malthusians of the West: ignment may shield us
from war, but science is 'lTI.nnott" for us to eradicate
of the world's research
,VlnflVflr, the capital of the state
of Jammu and Kashmir. Where humanity be today , if
Mrs . Gandhi were still alive to the inalienable rights of
every human being?
They thought that the defense
cious about my true identity.
Modem (High) Arabic.
These people also discussed
should look like. They
DM 300,000 from Iran to del
become the least suspiwas
also told to speak in
my testimony in court
that I was to have received
the money to Mr. Shu-
beilat.
It was further decided that I would receive an artificial
beard, a moustache, and Arab clothing. Then the meeting
November 20, 1992

Indira Gandhi speaks in Washington at the National Press
Club in July 1982 . To her left is her son Rajiv Gandhi, the
fu ture prime minister who was, like his mother, assassinated by
the enemies of a sovereign India .
is not relevant to us because it is earmarked for the priorities
and to the induced appetites of technological leaders .
. . . Each of our countries must strengthen its domestic
base of science and technology and collectively we should
devise more effective mechanisms for the pooling of our
experiences. Earlier Non-Aligned gatherings have considered
this subject. At this summit, let us move forward to
make collective self-reliance a reality."
Under Mrs . Gandhi's leadership, the 1983 Non­
Aligned summit put forward the boldest demands for ending
the financial and economic tyranny of the western
banks and their enforcer, the International Monetary
Fund. The final declaration called for an "international
conference on money and finance for development," to be
held outside the auspices of existing financial institutions,
and stated that the mission of this conference should be to
create a new world monetary system whose purpose
would be to finance global development. "1 am amongst
those who believe that no sustained revival in the
ended in this office.
The next day I was taken to the building of the Secret
Service. I met there with a small, fat person wearing a moustache
and another tall person of ca. 1 .80 meters and fair hair.
They had a suitcase full of cosmetics out of which they took
a beard and moustache and put it on me. Then they took
photographs. One person told the photographer that he
should be careful not to get any chairs or doors of the room
into the picture . He should only have the empty wall as
EIR November 20, 1992
North is possible without the develJpment of the South,"
Mrs . Gandhi stated in a subseque i t Unctad meeting in
June 1983.
It was at this point, when Mrs. IGandhi' s stature as a
world leader in the fight for a new just world economic
order was also at its height, that the British-orchestrated
Sikh secessionist movement in Punjab dramatically escalated.
ElR 's 1985 book Derivativ� Assassination fully
documented the British origin of th� plot to murder Mrs.
Gandhi. The final go-ahead for Mrs. Gandhi's murder
came in August 1984, when the Ld don Economist published
a cover caricature of Mrs. Gandhi as Kali, the
Indian goddess of destruction. B the end of October,
Mrs. Gandhi had been killed by bqdyguards, as she was
on her way to an interview with BjTitish Trust operative
Peter Ustinov.
"She is no more" came the announcement of Mrs.
Gandhi's death.
In the years since Mrs. Gandhi 's assassination, world
events have redefined the global strategic chessboard. The
collapse of the Soviet empire and tge liberation of eastern
Europe from the communist yoke offered humanity a
unique opportunity to create the ne just economic order
that Mrs. Gandhi and the Non-Aligned Movement had
fought for. Instead, the IMF and the looters of the West
have descended upon the East liRe vultures; the Non­
Aligned Movement stands in diskrray , questioning its
very existence. Where would huminity be today, if Mrs.
Gandhi were still alive to demand t�e inalienable rights of
every human being to economic de,elopment and national
independence? Would the Anglo-�mericans have been
able to carry out the U.N. war to obliterate Iraq, if Mrs.
Gandhi had been there to speak 0ut against it? Would
London-trained bureaucrats in the W.N. be able to dismiss
national sovereignty as a bygone co1i ncePt, with Mrs. Gandhi
still on the world scene?
Like Joan of Arc before her, ¥rs. Gandhi's life was
an inspiration for those who would take all of humanity
into their hearts and summon the cdurage to give the leadership
the world so desperately nedds today.
I -Linda de Hoyos
background. They took about six hotos of me without the
Arab clothing. But they gave me la different dark jacket to
wear.
After that I was taken back to the villa for lunch.
Soon afterwards Mr. Abu Hai hem arrived and thanked
me for my collaboration. He tOld) me that I would be paid
back for the loss of the DM 18,0?? and that I would receive
more. I told him that 1 didn 't need anything else except what
I had spent on expenses.
International 37

In the evening I was taken to the Alwaha restaurant in
Amman. We had dinner and also drank alcohol . Present were
Mr. Abu Hashim, Mohammed Hijazi and about 3 to 4 other
persons.
After dinner we drove back to my villa. There I was told
to make a phone call to Mr. Hafez Amin and tell him that I
knew Mr. Shubeilat, that I had received DM 300,000 from
Iran and that I had delivered that amount of money to Mr.
Shubeilat. Abu Hashim then dialed a number not known
to me . I was put on with Mr. Hafez Amin and told him
accordingly.
As I said before , I played along in this game because I
feared for my wife and my children.
The next day, Friday , was a day off. In the morning I
was driven to the Dead Sea in an American car. There I was
photographed several times. In the afternoon we returned to
the villa. Abu Hashim was already waiting for me. He was
impatient because we had been out for such a long time.
Mr. Abu Hashim explained to me that we had to rehearse
my testimony. He then went through with me that my testimony
was to be as follows:
My name would be Yasin Ramadan AI-Yassin. I was to
have been born in 1945 in Dir Alsur. My profession was to
be a businessman who traded with Syria and Iran. I had been
to Iran, and met Mr. Hussein Shirazi, a high government
official with the President of Iran . He had given me
DM 300,000 which I was to deliver to Mr. Shubeilat. I was
to deliver the money to Mr. Shubeilat only after he had given
a secret code word "my birthday on Friday." Furthermore, I
was to testify that I had visited the Jabri restaurant in Amman
and that I had called a Mr. Abu Ahmed from there. He was
reached and had told me that he would come by in half an
hour. He had asked me how he could recognize me. I had
told him that I wore an Arab-style long shirt and a jacket. I
was to be waiting in front of the restaurant.
Furthermore, I was to state that a car had arrived with
Mr. Shubeilat inside. We had then driven to a flat. Inside the
flat Mr. Shubeilat had given me the secret code-word and I
had given him the DM 300,000.
All of this was to have happened on April 4, 1992. The
4th of April was chosen because I had actually arrived in
Amman on that date and therefore it was sure that I would
definitely remember this date. But I was to state that I had
flown from Teheran to Damascus on April 4, 1992 and then
had traveled on to Amman by bus.
Furthermore, I was told to state that I had received two
letters from Mr. Abu Ahmed two days after the delivery of
the money. The letters I was to have delivered to Mr. Hussein
Shirazi in Iran. Then I was to have flown to Iran and later
heard the news through the media that Mr. Shubeilat had
participated in a coup attempt against the king. For this reason,
I had then decided to voluntarily travel to Jordan to offer
myself as a witness.
I was then given a white piece of paper on which I should
38 International
confirm as Yasin Ramadan AI-Yassin that I had offered myself
out of my own free will as a witness. I then wrote the preformulated
text in handwriting onithe paper and also signed.
Then I had to continually rehtarse this testimony with the
present people who were: Abu Elashim, Mohammed Hijazi
'
and one,to two more persons.
Early in the morning on Santday I was picked up. I was
given my Arab clothing. A bear4 and moustache were glued
on my face. i
Mr. Abu Hashim told me that I had no reason to be afraid
but should speak as normally as possible. The judge and the
State Attorney were in the kno\\j and I would only be asked
questions by the judge. The defense lawyers would be allowed
to ask questions to him onlY through the judge and the
judge would not allow such ques ions.
We arrived at the Military Co rt where the State Attorney
was already waiting. I was aske to introduce myself to the
State Attorney, who was accom anied by other persons, as
a witness.
I did as I was told. I was taken to the room of the State
Attorney where I spoke with hijrn. He told me that in my
disguise even he would not reqognize me any more. The
State Attorney then said that he had to leave because he did
not want to be seen with me by [the defense lawyers. After
half an hour, he came back to tejll me that the beginning of
the session would be a bit delayed because the defendants had
to be brought to the court from different prisons in Amman.
Because Laith Shubeilat had alJready arrived in the court
building, the State Attorney told roe that he was already here,
that he was wearing a light-colOlted shirt with short sleeves,
that he had glasses on and had ! a slight beard and that he
would be sitting in the first seat! on the defendants' bench.
After about one and a half hour$ the session started. I was
called into the courtroom. On thel details of the arrangements
of the seats for the lawyers, S�te Attorney, defendants'
bench, and the defense lawyers, �refer to the enclosed sketch
of the courtroom.
I was called to the witness-st41nd on which the Bible and
the Koran were placed. Judge Facj)uri asked me for my name,
family status, and my profession. I testified as rehearsed.
The judge then asked me for my passport. I passed to him
the Syrian passport that had beeni handed out to me only that
same day. The defense lawyers wanted to see the document,
which the judge refused to grant He said that the number
and the date of the passport, which he had announced, had
to suffice for them.
I was then asked if I knew any of the defendants. As I
had been instructed, I stated that I knew Mr. Shubeilat. I
turned around and pointed toward him.
The judge then asked me in which context I had met Laith
Shubeilat. I then told my story aslworked out before.
After my testimony, the defense requested a copy of my
passport in order to inform the F�reign Ministry of Iran and
the Syrian embassy in Amman. The judge refused.
EIR November 20 , 1992

A dispute ensued between the defense and the court.
After my testimony, I was taken away and driven to the
office of the Secret Service. I was greeted by Abu Hashim.
He kissed me and thanked me for my testimony by strongly
shaking my hand. Later on, also the State Attorney , came
who also kissed me and also thanked me heartily.
I had to hand in my Syrian passport. The beard and moustache
were removed. I gave back the Arab clothing (except
for the long shirt) .
I was taken back to my villa. Mr. Hafez Amin told me
there that he was going to Cairo the next day and asked if I
would like to accompany him. I refused by saying that I
wanted to return to my family.
At 7 p.m. I met with the chief of the Military Court, Mr.
Mohammed Mango. As a present, I was given a bust of
King Hussein, made of marble. Also Mr. Mango thanked me
heartily for my testimony.
Afterwards we went for dinner to the restaurant Attilal
Assabaa. We stayed until midnight.
I was taken back to my villa. I was left alone with a
servant. I was very nervous, and strong fear crept up on me.
I asked the servant to call Abu Hashim and ask him how I
would get to the airport. He did call Abu Hashim and he tried
to quiet me down by saying that somebody would come and
pick me up.
At 3:30 a.m. the bell rang. At 5 o'clock we left for the
airport in an American car. We had to wait for two more
people there who arrived at 6 o'clock. I was taken to the
plane and left for Munich via Frankfurt.
The next day , I called from Munich the publishing company
of the newspaper Ad Dastour in Amman and asked
them to give me the telephone number of lawyer Bakr. They
gave me the number and I called Mr. Ibrahim Bakr and told
him the whole story . Two hours later I received a call in
Munich from Abu Hashim who threatened me. He said that
they would get rid of me, and if they did not do it, the Iraqis
or the Iranians would do it. I replied to him that they could
do as they pleased and hung up.
Several days later I called the private number of Mr.
Shubeilat. I talked to his daughter and apologized to her for
my testimony. I told her the whole story and asked her for
understanding of my situation.
About three hours later, the wife of Mr. Shubeilat called
back and told me that I could tell her everything without fear
of being listened to because she was not calling from her
private phone. I told her the whole story. I also offered to
answer any further questions.
I have read this protocol and confirm the truthfulness of
its content.
Munich, Nov. 6 , 1992 [signature of Ali Shakarchi]
The questioning of the witness was conducted by me .
The answers were fully incorporated into the protocol.
Munich, Nov. 6 , 1992 [signature of Dr. Guenter
Seefelder]
ElK November 20 , 1992
Is Kashmir sllpping
away from Pajkistan?
by Ramtanu Maitra
With the failure of the Jammu and Kashmir Democratic Alliance
(JKDA) to cross the line of cdntrol from the Pakistaniheld
part of Kashmir on Oct. 26 , fakistan is coming under
pressure on the Kashmir issue for tlile first time.
What has emerged from the theatrics which highlighted
the JKDA' s proposed crossing of tbe line of control between
India and Pakistan to unify Kashmir, is that Pakistan, despite
popular support, cannot afford to allow the JKDA-led adventure
to continue and risk plunging Pakistan into a likely war
with India. At the same time, the' Indian part of Kashmir,
mainly the valley, remains in turm()il and the Indian security
forces have their hands full trying Ito control militant Kashmiris
who are demanding secession from India. Nevertheless,
India is continuing its no-nonsense posture on the Kashmir
militants and is slowly pushing Pakistan into a comer.
I
Internal pressures
Despite rhetoric implying that lslamabad is prepared for
a jihad to liberate Kashmir and make it a part of Pakistan,
Pakistan is afraid to go beyond arm�g, training, and instigating
militants to carry out anti-India ,"ctivities within the Kashmir
Valley. The Pakistani Army pas also shown that it is
ready to shoot down anyone who \jiolates the line of control
in Kashmir, .as Pakistani troops fi¢d on Kashmiri militants
in February and again in October. I
Given Pakistan's strategic constraints, the independenceseeking
Jammu and Kashmir Liberation Force (JKLF) is
gaining credibility throughout Kashmir. The JKLF is led by
Amanullah Khan, headquartered i� London, and calls for a
Kashmir independent from both In�ia and Pakistan.
Pakistan is also losing its grouM on its diplomatic position
internationally. At the end of �ctober, German Foreign
Minister Klaus Kinkel, visiting Isl�mabad, brushed aside the
longstanding Pakistani position th*t the Kashmir conflict be
resolved by a 1940s U.N. resolutibn calling for the right to
self-determination of the Kashmiri$. Such rights are confined
by the resolution to a decision wh�ther to join India or Pakistan,
and do not allow for an indewndent Kashmir.
Kinkel told his hosts that the p.N. resolution is dated,
and that the Shimla Agreement o� 1972, signed by the late
Prime Minister Zulfikar Ali Bhuttq and Mrs. Shrimati Indira
Gandhi, to resolve all bilateral issues between India and Paki-
International 39

stan through negotiations and not through military means, is
the starting point for a peaceful solution.
While still smarting from Kinkel's statement, Islamabad
was handed similar advice from visiting British Foreign Secretary
Douglas Hurd. Hurd said that the U.N. resolution of
the 1940s could at best serve as background, and advocated
initiation of a dialogue under the Shimla Agreement. He also
pointed out that India should observe human rights in the
valley and initiate a "valid political process." "I have told
Pakistan not to allow material support [to those backing independence]
which can only impede basic solution" of the
Kashmir crisis, said Hurd.
Islamabad cannot but take notice of increasing allegations
internationally that Pakistan is aiding and abetting terrorism
against India. On the current affairs program "Dateline Pakistan,"
telecast from Islamabad on Nov. 5, former Foreign
Secretary and former High Commissioner to India Abdus
Sattar conceded that Indian diplomats had succeeded in projecting
"the struggle for emancipation of Kashmiri people in
a manner that equates some of the acts of freedom-fighters
with so-called acts of terrorism."
Restraining war
While the Bush administration was keen on restraining
both India and Pakistan from engaging in an all-out war over
Kashmir, the Clinton administration may be more eager to
accuse Pakistan of aiding terrorism.
The reason behind such speculation has something to
do with Israel, and with Pakistan's growing problems with
Washington. Israel considers Pakistan's nuclear weapons development
as a threat to its own designs in the Middle East,
and under the Clinton administration, U.S. pressure on this
issue will likely increase.
This does not mean that the Kashmir conflict will be
resolved in India's favor. India, having withstood the surge
of militancy in the Kashmir Valley during the last three years
and now on the road to returning Punjab to normalcy after a
decade of violence, is in no mood to concede anything to
Pakistan.
But it is equally evident that the Kashmiris, most of whom
are Muslims, are not willing to remain either under the Indian
or Pakistani flag unless serious political concessions are made
by both sides. Meanwhile, the JKLF, helped by external
forces centered around Britain, will strengthen its voice for
an independent Kashmir.
As the Kashmir problem hurtles toward the formation of a
new country, both India and Pakistan seem paralyzed. Indian
politicians may consider such a solution preferable to Kashmir
becoming a part of Pakistan. On the other hand, Pakistani
politicians have all along fed a staple diet of anti-Indianism
to the population. For four decades and longer, such anti­
Indianism was centered around Kashmir and Pakistan's acquisition
of nuclear weapons as a necessary armor against
India's nuclear development.
40 International
'British Itaqgate'
Thatcher, and
by Mark Burdman
On Nov. 9, the British governtnent precipitously dropped a
case in London's Old Bailey �ourt against three executives
of the Matrix Churchill machine tools manufacturer, which
had been charged with illega�ly selling sensitive militaryrelated
equipment to Iraq. Thq case collapsed when former
British Trade Minister Alan Clllrk admitted in sworn testimony
that Matrix Churchill was acting in accordance with authorized
British government pqlicy.
Clark's contentions were �omplemented by testimony
from agents from Britain's MI-� and MI-5 intelligence agen­
cies, that Matrix Churchill mapaging director Paul Hender­
son had been carrying out int�lligence work for the British
secret services since the early 1 P70s, and by the release to the
court of documents, which foun British government ministers
had unsuccessfully tried to keep out of court, which prove
the collusion of the cabinet of ¢.en-Prime Minister Margaret
Thatcher, in the shipment of $s to Iraq.
The collapse of the government prosecution is sending
shock waves throughout Britaih, as well as across the Atlantic
into the United States. A co�sequence may be that, in one
of the great ironies of modem �istory, the same leaders who
mobilized "the world" for wat against "Hitler Saddam" in
1990-91, may soon find them�elves behind prison bars, for
their duplicitous role in armi�g the same country against
which they were mobilizing fot war.
Thatcher, for example, e\1idently either personally authorized
arms sales to Iraq, or �ave the nod to other cabinet
officials' authorization, right up to the eve of the Iraqi invasion
of Kuwait. Yet it was the lsame Thatcher, who became
the world's most sanctimoniOlfs and hysterical crusader for
war against Iraq , within hours :of Iraq's Aug. 2, 1990 invasion.
Her successor, John Majbr, is also coming under fire,
from the leaders of British opppsition parties and others, for
his alleged role in having misIied the British Parliament, as
late as January 1991, about the British government's arms
sales policy toward Iraq.
As to the self-professed leader of the "Gulf war coalition"
and would-be new Roman emp�ror George Bush, the reverbations
of the Matrix Churchill t'British Iraqgate" case in the
United States will only add to his woes. The late-October
EIR November 20, 1992

may send Major,
Bush to prison
release by special prosecutor Lawrence Walsh of a memorandum
by former V.S. Defense Secretary Caspar Weinberger,
pertaining to the parallel matter of covert V. S. arms sales to
Iran, had already raised the possibility of Bush becoming the
first V.S. President in history to follow his term in office by
a term in jail. The well-informed British satirical magazine
Private Eye has speculated that Bush may soon meet that
fate .
EIR told you so
As sweet as such an historical irony may be, the implications
of the Matrix Churchill case go far beyond that. There
is a fundamental historical lesson to be learned. What is
unfolding in Britain in November 1992 fully confirms, down
to the most minute details, what EIR founder Lyndon
LaRouche had been warning about, back in May-June 1990,
when he issued an alert to the effect that highest-level Anglo­
American networks, in league with relevant layers in Israel,
were planning to launch a war in the Middle East.
Certain intelligence agencies and so-called Middle East
experts reacted, at the time, with vituperation and scorn,
when informed of LaRouche's forecast. LaRouche was
proven right by the outbreak of the Gulf war, and now, the
Matrix Churchill affair is effectively proving that Thatcher
et al . were conspiring to cause such a Gulf war to happen.
From this standpoint, what Thatcher, Bush, and their coconspirators
must eventually be indicted for, beyond perjury
and violation of their own country's legal prohibitions against
arms sales into the Gulf, is for crimes against humanityfor
planning and launching aggressive war and committing
genocide against the people of Iraq.
A policy of 'realpolitik'
In public statements , including in Old Bailey, former
minister Alan Clark blithely maintained that British arms
policies toward Iraq were fully justified, since "the interests
of the West are well served by Iran and Iraq fighting each
other, the longer the better."
In a Nov. 11 commentary in the Daily Telegraph. Clark
defended this policy from the standpoint of legitimate realpo-
EIR November 20, 1992
litik. invoking the 19th-century view of Lord Palmerston
that Britain has no permanent "frie�ds," but only permanent
"interests ." Wrote Clark: "The 'world stage' is a greedy,
hostile and treacherous place, where there are no prizes for
coming second. It is necessary at al� times to have a clear and
overriding awareness of British in�erests, and how, in any
particular situation, these are best served. . . .
"The Cold War is over. . . . Th� fragmentation of power
centers, and the conflict and overl�p between spheres of influence
as potential conflicts sprea� through the Middle East
and the Pacific Rim, is reminiscent of the 19th century. Our
policy has to be faster in response: more strongly founded in
realpolitik and less on trust and goqdwill that is not based on
mutual respect. . . . Against such aibackground, the luxuries
of moral posturing, the cultivation ,of peer-esteem by diplomats,
should be indulged sparinglYr "
Thatcher, Ridley, Rowland, stage a war
The essential matter at stake in the Matrix Churchill case
as such is the following:
The three officials of the firm-rPaul Henderson, Peter
Allen, and Trevor Abraham-wqre charged by Britain's
Custom and Excise with having sold sensitive equipment to
Iraq in violation of what was ostejIlsibly an official British
arms embargo.
As the case proceeded, four lienior officials from the
Thatcher regime-cabinet mini�ters Kenneth Clarke,
Michael Heseltine, and Malcolm �ifkind, and Minister of
State at the Foreign Office Tristallj Garel-Jones-submitted
memoranda to the court, demandiqg that some 500 sensitive
documents be withheld from the c9urt, under what is called
in Britain "public interest immunit;y." Almost always, such
an invocation of immunity succe�ds in the British courts,
since cabinet ministers are , by what passes for law in Britain,
"ministers of the Crown," and the�fore are under a form of
special protection from the monat'jChy. But in this case, as
one London insider told EIR. "the I court overruled the Sovereign."
As it now turns out, what they were trying to hideand
by which concealment they \\fere willing to send three
innocent individuals to jail-was �at it was the British government
itself, in violation of a l,Inited Nations-mandated
ban on weapons sales to both Iran and Iraq, in violation of its
own publicly stated guidelines, anp in violation of repeated
promises to the Parliament, that hap been authorizing weapons
deals to the Iraqis.
The single most damaging piecre of evidence, is a document
that reports that on July 1�, 1990, members of the
British cabinet met, under the direction of Foreign Secretary
Douglas Hurd, and approved � secret policy change,
allowing for British arms sales to �raq, and countermanding
Great Britain's own embargo on sUFh sales. Eight days later,
a Matrix Churchill shipment left Britain for Iraq.
These two dates are , respectivj!ly, 14 and 6 days before
International 41

Iraq invaded Kuwait!
Why was this done? After all, by July 17 at the latest,
from statements made by Iraqi, Kuwaiti, and other Mideastern
leaders, it had become clear to anybody with eyes and
ears, that a giant crisis was erupting between Iraq and Kuwait.
So why did the British government expedite, rather
than impede, arms sales to Iraq? Since Nov. 9, 1992, the
general line coming from London, is that this was a "cockup"-bungling,
incompetence. But this explanation won't
wash, given the extensive evidence of British and American
actions to set up Iraq's invasion of Kuwait in the first place.
The new Profumo affair
Internally in Britain, the collapse of the Matrix Churchill
prosecution is only adding to the woes of a Prime Minister
John Major who is already beleaguered by the collapse of
the economy, by scandals hitting several cabinet ministers,
by a revolt within his own Conservative Party, and by polls
showing him with a 14% approval rating. So heavy is the
pressure on Major, that he was obliged to announce the
formation of an "independent judicial inquiry" to look into
the case. Major's cynical calculation is that the announcement
of such an inquiry will buy him some time, since it
will take some months for the investigation to announce its
findings.
The Nov. 12 London Guardian characterized this as part
of a "desperate damage-limitation exercise," with the aim
of "preventing the inquest into Matrix Churchill from ballooning"
in such a direction that a "wider Whitehall conspiracy
to sell illegal weaponry to Iraq" will be unearthed that
will call into question Major's "integrity or his competence."
One included effort, will be to attempt to find a scapegoat,
whether it be former minister Alan Clark or even Margaret
Thatcher. Hence, Major is denying that he was at the July
19, 1990 meeting of cabinet ministers, and the British Foreign
Office released a statement on Nov. 11 that that meeting
was "a secret meeting the foreign secretary was asked to chair
by the prime minister"-Le., Mrs. Thatcher.
This attempt to shift the blame is likel y doomed to failure.
As London Times political editor Peter Riddell wrote on Nov.
11, the Matrix Churchill scandal could tum out to be a new
"Profumo affair," a reference to the famous intrigues of 1963
centered around high-society prostitute Christine Keeler's
affairs with Defense Secretary John Profumo and a top Soviet
intelligence operative, the which intrigues brought about the
fall of the Conservative Harold Macmillan government. According
to Riddell, "the Matrix Churchill affair stinks-of
collusion, hypocrisy, and deceit. ... The affair generally
adds to the troubles of a government which is already tottering
from crisis to crisis almost daily. Mr. Major can do
without further bad headlines."
This is not to say that Mrs. Thatcher will be spared. Aside
from new revelations about her own illicit activities, there is
the curious story about her son Mark and Iraq. This is amply
42 International
exposed in the new book Profits of War, by Israeli intelligence
operative Ari Ben-Menashe (New York: Sheridan
Square Press)-the book which has been withheld from publication
in Britain because of its contentions about Mark
Thatcher! But the cat is already out of the bag: On Nov. 10,
maverick British Labour Party parliamentarian Ken Livingstone
raised a question in the House of Commons: "Will the
officers of MI-5 and MI-6 be under compulsion to tell the
[judicial] inquiry whether they advised the former prime minister
of her son's arms dealings in this area and his own
involvement in the shipment of munitions to Iraq?" Livingstone
and two other MPs specifically cited the Ben-Menashe
book.
Bush: in the loop
Nor can Major contain the eflfects of the scandal spreading
across the Atlantic. For months, the American political
scene has been rocked by the "Itaqgate" scandal, involving
Bush administration duplicity in funding deals with Iraq, via
the Atlanta branch of Italy's Banca Nazionale del Lavoro
(BNL). The Nov. 10 London Financial Times, in a dispatch
from New York, reported that the collapse of the Matrix
Churchill trial "triggered an immediate political reaction in
Washington," where the Bush administration was being accused
by members of Congress ofi"covering up its knowledge
of and possible involvement in the activities of [Matrix Churchill's]
Ohio affiliate." Dennis Kane, the u.S. House Banking
Committee staffer who has led congressional investigations
into the Iraq arms sales affair, commented: "President
Bush, Brent Scowcroft, his national security adviser, and
other officials have claimed it Was not U.S. policy to arm
Iraq. Revelations in the Matrix Churchill case raise serious
questions about the veracity of tbeir statements and raise the
question of whether the u.S. in fact illegally helped to arm
Saddam Hussein."
On Nov. 12, the lead story of1the Financial Times reported
new information, that U. S. authorities had granted immunity
to Matrix Churchill managing director Henderson, thereby
effectively impeding any efforts to investigate the firm's
role in arms deals with Iraq.
Bush is already in serious trouble over the parallel scandal
of arms sales to Iran, known as "Irangate" or "the Iran case."
Aside from the Weinberger memo, which provided further
evidence that Bush, despite his denials to the contrary, was
very much "in the loop," the British magazine Private Eye
commented in its late-October issue: "The key question in
the United States is not whetheriGeorge Bush will be President
next year, but whether or not he will be in prison."
The magazine said the BNL-Iraqgate scandal leads back to
Irangate, "and any clearing out of the 'Georgean' stables
might provide yet more proof that the man who has always
claimed he was 'outside the loop' of Iraqgate was the man
who started the whole scandal 0ff-former Vice President
George Bush."
EIR November 20, 1992

Bosnians cry for help
to survive winter
On Nov. 4 the Schiller Institute announced that it had received
an urgent appeal from the government of Bosnia­
Hercegovina to pull together humanitarian aid for hapless
Bosnians trapped within their own frontiers by the Serbian
army . In its release, the Schiller Institute-a foreign policy
and cultural think tank that teaches principles of republican
statecraft-announced its intention to immediately launch
such a worldwide effort.
According to the appeal , at present over 1.5 million people,
including the inhabitants of Sarajevo, are cut off from
the most basic means of survival, while another 1 million
inside Serbian-occupied areas of Bosnia are also in desperate
need. The government warned that hundreds of thousands,
including many children, will die this winter unless they can
be reached with basic supplies.
Referring to this appeal, Helga Zepp-LaRouche, founder
of the international Schiller Institutes, stated: "The western
world has stood by and watched for almost one and a half
years, as the Serbians prosecute a barbarous war of aggression
in the heart of Europe. Yet another catastrophe of gigantic
dimensions looms: 2.5 million people may die of cold or
hunger this winter.
"If the political institutions leading us continue to be so
cowardly, so immoral, that they do not move to stop this
mass murder, then European civilization will perish and go
the way of the Roman Empire, whose elite was also incapable
of responding to dangers.
"Humanitarian aid is no substitute for stopping aggression,
but it is also urgently needed. I call upon all men of
good will, in the name of brotherly Christian love, to take
part in this mobilization and open their hearts to the suffering
of those who lie under siege, or who have fled their homes."
What is needed, and where
To escape death at the hands of the Serbians, people
have gathered mainly in the following places: Sarajevo; in
Hercegovina, the areas of Neum, Mostar, Capljina, Konjic,
Stolac; in central Bosnia, Travnik, Bugojno, Zenica, Zavidovici,
and Gorazde (where 50,000 have been added to the
city's 50,000 besieged inhabitants); in the northeast, Tuzla,
Brcko, Orasje, B. Samac , Gradacac; in the northwest, Bihac ,
B. Krupa, Cazin, and Kladusa; in the Serbian-occupied areas,
Banja Luka, Prijedor, B. Gradiska; in eastern Hercegovina,
the towns of Trebinje, Gacko, and Bileca; and in the
Drina region, Foca, Zvornik, and Bijeljina (see map) .
The humanitarian aid collected will be shipped either to
EIR November 20, 1992
Towns with refugee concentrations
in Bosnia-Hercegovina
i
Zagreb (Croatia's capital), or th� ports of Split or Ploce;
and thence, through whatever corridors are open, into the
relevant areas of Bosnia.
Items on the list provided by t�e government of Bosnia­
Hercegovina include: wheat, flour, com, rice, pasta, canned
food (meat, fish, vegetables), powpered milk, oil, salt, baby
food, sugar, potatoes, cabbage, b'\ltter, cocoa, frozen meat,
smoked meat, vitamins B, C, E, apd D, composite vitamins
in tablet or powder form, hygieniq material, detergents, water
purification chemicals and equipment, plastic sheeting (to
insulate window frames against th� cold) , tents for more than
1 million homeless, blankets, clot�ing, ovens for heating and
cooking, containers for use as sqelters, material for small
pre-fabricated houses, building IUqIber and other home repair
materials, gasoline, and diesel fue�.
The following medical supplie� are also needed: surgical
and medical equipment suitable for field conditions, bandages
(gauze and elastic), adh¢sive plaster, disposable
gloves; intravenous cannulas and; catheters; TB , polio, typhoid,
and DPT vaccines; disinfeqtants, anesthetics, analgesics,
adrenalin, intravenous and or�l solutions; dialysis material,
blood pressure medication, flntibiotics, mineral salts,
penicillin, insulin, and syringes. I
The Schiller Institute advises, anyone wishing to form
a committee to gather these supWies to contact one of the
following coordinators: Mr. Paol� Raimondi or Miss Katharine
Kanter in Wiesbaden, Germ�y, tel . 06122-916-0, fax
061 22-9 1-61-01; or Mrs. Elke Filpmen in Munich, Germany,
089-725-40 13, fax 089-725-4922.
International 43

Helga Zepp-LaRouche visits Brazil
to forge \Vorld coalition for freedom
Gennan political leader and founder of the Schiller Institute
internationally Helga Zepp-LaRouche arrived in Brazil on
Nov. 6 for a week of public and private discussions with
prominent political leaders , scientists, academics, journalists,
and others , on how most rapidly to accomplish a twofold
task: forcing U. S. authorities to free her unjustly imprisoned
husband, American statesman Lyndon H. LaRouche, and
building a world coalition of patriots with such power that it
can replace the dying international financial order sustained
by usury, war, and genocide, with one built upon national
sovereignty and economic justice.
During her visit, Zepp-LaRouche also attended a conference
sponsored by the St. Michael Archangel Foundation on
"The Fifth Centenary of the Evangelization of America, and
Ibero-American Integration," held Nov. 9-13 in Anapolis,
Brazil , and participated in the inauguration of the Center for
Ibero-American Studies and Solidarity on Nov. 14, also in
Anapolis.
Coming less than a week after the U . S. elections, discussion
of what to expect from the incoming Clinton administration
was inevitable. Zepp-LaRouche's response stressed that
the onus is on Clinton: "If President-elect Bill Clinton wants
to show that he is different from George Bush, he will reverse
the greatest travesty of justice of the Bush administration,
the jailing of Lyndon LaRouche," she insisted.
Head to head with Kissinger
Her arrival in Brazil comes at a moment of tremendous
political openness in the strategically important South American
country, whose citizens are debating what direction the
nation should take following the ouster in September of Pres ident
Fernando Collor de Mello on corruption charges.
Playboy Collor had been hailed worldwide as a hyperenergetic
example of the new kind of "modem" Presidents
in Ibero-America who reject "outdated" nationalism in favor
of globalization. President George Bush praised Collor as
"my kind of guy." Brazilians suffering the economic depression
resulting from his policies were not so enamored with
Collor, however, and when congressional investigators uncovered
proof that Collor and his cronies had used their free
trade policies to rob up to $300 million from public coffers
for their personal use, they took to the streets by the thousands
to demand that the President be impeached.
With Collor's impeachment trial now under way in the
44 International
Senate, Brazilian patriots are mote optimistic than they have
been in years that crucial changes can be effected, if popular
support is mobilized.
I
Ironically, Zepp-LaRouche's visit to Brazil overlapped
that of fonner u.S. Secretary of State Henry Kissinger, a
longstanding political enemy of the LaRouches, who came
to threaten the new government of Brazil that it must continue
to adhere to Collor's neo-liberal " free trade" recipes, even if
those policies, according to new President Itamar Franco,
now threaten to create a "social explosion" in Brazil. Kissing- .
er is "confident" that the new government will not be "a
nationalist government," one of his associates assured journalists
in the United States, quidkly adding, however, that
"the jury is still out on that."
Among numerous meetings,: Zepp-LaRouche met with
the president, vice president, and other officers of Brazil's
National Press Association (ABI). ABI's president, 94-yearold
Barbosa Lima Sobrinho--who is virtually a national institution-has
written several at1ticles about the LaRouche
case and is an ardent admirer of the "American System"
of economics advocated by 19th�century economists Henry
Carey and Friedrich List, which LaRouche has elaborated.
So respected is Barbosa Lima that he was chosen along with
the Brazilian Bar Association tol present the fonnal request
to the House of Representatives to impeach President Collor
de Mello.
According to coverage of Zeipp-LaRouche's visit in the
Rio de Janeiro daily Jornal do Commercio. she discussed
"the current status of her husband, who will have spent four
years in jail in January, for oppiosing the new world order
promoted by President Bush" and for opposing the policies
of the International Monetary Fund. LaRouche's writings
and proposals are widely known in Brazil, and have more
than once become the center of congressional debates on
economics, science, and environmental and population policies.
The Rio daily also noted that in her meetings, Zepp­
LaRouche described the tragedy unfolding in eastern Europe,
where she has traveled extensively since the fall of the Berlin
Wall in 1989.
Hope in the face of world crisis
On Nov. 9, Zepp-LaRouche spoke at the Brazilian Center
for Strategic Studies (Cebres), which brings together retired
engineers, military, and other professionals. In a broad-rang-
EIR November 20, 1992

ing strategic briefing, she outlined the devastating crises facing
the world today which, although horrible to observe,
don't mean that the situation is devoid of hope. "We are the
hope," she told her audience-not yet like a laser, but more
like the thousands and thousands of candles held by the patriots
of East Germany during the 1989 revolution. If enough
people mobilize and join the world coalition now being
forged, the "laser" will come into being.
The foremost concern of her audience is how to ensure
Brazil's independent development under current world conditions.
Zepp-LaRouche explained that we are today in a
crisis which most people cannot comprehend. The concern
which Brazilians have expressed about possible social upheaval
is but a small part of a world crisis that is far worse
than anything that happened in the 1930s, she said. The
catastrophe that will occur if the situation is not reversed will
"dwarf World War I and World War II." She outlined how
Africa is dying, Ibero-America is being given the Africa
treatment, and conflicts are ripping apart eastern Europe and
the former Soviet Union. As for the new U.S. President,
Clinton, his administration will be a "rude awakening" for
many people.
Zepp-LaRouche then explained how the world arrived at
this crisis, going back to the opportunities which presented
themselves in November 1989, following the crumbling of
the Berlin Wall. "The whole world could have changed . . .
this was a unique situation in history ," she said. And now, it
is breathtaking to observe how these opportunities have been
lost, and thrown away. Even from jail, her husband produced
a visionary program for Europe , in the concept of the Paris­
Berlin-Vienna "Productive Triangle" of high-technology and
infrastructure development. Had it been implemented, it
would have met everyone's aspirations for development and
stability. But people failed to understand one crucial point
that LaRouche had emphasized over and over: that the Triangle
would only work if it were understood that economic
liberalism as well as Marxism are bankrupt; the last thing the
people of eastern Europe or the former U.S.S.R. needed,
after having been looted for 40 to 70 years , was to now be
looted by the proponents of British liberalism.
Yet, this is what happened. Through cowardice, Germany
allowed eastern Europe to be looted by the same methods
by which the developing sector had been looted.
The result of these policies is that in Russia, there is now
the threat of the old communist nomenklatura combined with
the Russian chauvinists coming to power, which portends a
bloody future-an attempt to re-create the old Russian Empire
within the old borders of the former U.S.S.R.; but since
the newly independent nations will never accept this, the
only possible result is a Thirty Years' War, including the
possible use of nuclear weapons.
Zepp-LaRouche told the audience to look at the terrible
events of Bosnia and Croatia: Over 500,000 people may die
this winter according to the U.N.'s own estimates. Because
EIR November 20, 1992
of the moral indifference to this situation on the part of the
world's governments, if the Russian coup begins, then "our
future will be Bosnia and Croatia." All of Europe will be
affected by this situation. The Trilateral Commission, the
Bilderberg Society, and other suoh entities are now predicting
that East-West conflict wi$ be replaced by North­
South conflicts, and that migrations of people will be the key
problem to deal with. Even NATQ is discussing this, and
there is talk of putting up new wal� and barriers to prevent
refugees from entering their countries.
No time to lose
The situation is not hopeless, but "can we mobilize in
time?" she asked. Look at the Uniteq States, which is ready to
crumble internally because of its economic crisis. A situation
could develop there similar to what �appened in East Germany,
she forecast. Clinton is not the !answer; LaRouche must
be freed, she said. He is innocent, but he was jailed because
he opposed the establishment, inspiring or authoring programs
for how to develop virtually ,every continent and part
of the world.
"There is no reason not to rejpuild the world!" Zepp­
LaRouche told the audience. Out of the U.S. elections has
come a new coalition, joining the clvil rights movement and
the LaRouche movement, which will continue and expand
the mobilization begun over the las� several months. Clinton
is not popular, and as LaRouche ,has predicted, after six
months he'll be more hated than ev�n Bush was. "Our coalition,"
Zepp-LaRouche said, "is united by its opposition to
the Thirty Years' War," and its de�and for a new just world
order.
This new order requires: 1) a d¢bt moratorium, not only
for the Third World but also for Europe; 2) every country to
have the sovereign right to generateicredit; 3) the recognition
that the order of Creation is being violated; if we don't act,
God will punish us for failing to do so, and the world as
we know it will disappear. The b!lsis for all action by an
ecumenical movement must be imtl-go viva Dei-the living
image of God.
For Ibero-America, this meanf countries coordinating
among each other to build the necessary great projects for
economic development. Brazil has !l special mission to carry
out. It, along with Argentina, must be the engine for the
development of Ibero-America. II/l Brazil, she asked, "is
there not someone with the qualiti�s of a Charles de Gaulle
who can come forward," and with his unimpeachable character
and behavior, be an inspiration to the nation's youth and
give them hope for the future?
In response to a question later, Zepp-LaRouche assured
her listeners that her husband, who is 70 years old, would
indeed be a candidate in the United States again, and pointed
to the example in Germany of Konrad Adenauer, who became
chancellor at age 74 and left office when he was close
to 90.
International 45

Colombia adopts Fujimori tattics
in battling narco-terrorism
by Javier Almario
Forced by pressure from such institutions as the military and
the Catholic Church, by the outrage of the population, and
by a tidal wave of new terrorist assaults which claimed the
lives of more than 40 people (the majority ofthem policemen)
in less than 48 hours , the government of Cesar Gaviria Trujillo
decreed a state of "internal commotion" on Nov. 8, in a
long-overdue effort to respond to the bloody challenge of
Marxist terrorists and their drug-trafficking associates.
The special state of emergency will last 90 days, with a
possible extension of 120 more , during which time the Gaviria
government will issue a series of decrees aimed at destroying
the financial and political protection apparatus of the
narco-terrorists, and to facilitate a military and judicial offensive
against the subversive insurgency. "I know that all of
Colombia is awaiting decisive action against the terrorists,
against the assassins and kidnapers, against this handful of
mad fanatics," stated President Gaviria in a televised address
announcing the emergency presidential decree.
Among the first measures dictated by the government the
next day were: severe penalties against any media which
interview the criminals, make apology for their actions, or
directly broadcast details of ongoing military operations; a
freeze and confiscation of bank accounts, real estate, stocks,
and investments traceable to the terrorists (the government
estimates that the different narco-terrorist groups have savings
or investments of some $500 million); the government
will directly control management of the oil royalties from the
departments of Arauca, Putumayo, and Casanare, to prevent
those funds which normally go into local treasuries from
swelling terrorist coffers; cancellation of the contract of any
foreign company which pays protection money or ransom to
the terrorists; suspension or firing of any government official
who holds dialogue or collaborates with the terrorists; severe
penalties for anyone who assists the terrorists or refuses to
inform on their activities; suspension of land distribution by
regional managers of the Colombian Institute of Agrarian
Reform, who generally hand over territory to agents and
frontmen of the terrorists; an increase in life insurance for
members of the Armed Forces; and payment of rewards to
anyone who gives information leading to the capture of the
narco-terrorist chieftains.
46 International
'If Peru can do it . . . '
These long-awaited measures were to a large degree inspired
by the fight being waged in next-door Peru by President
Alberto Fujimori, whose popularity has soared in both
his own country and in Colomtilia ever since the capture of
Abimael Guzman, the psychoti� leader of the Shining Path
narco-terrorists in Peru. Indeed, ever since Guzman's capture
, the question has increasintly been, "If Peru can do it,
why not Colombia?"
Representatives of the Colombian business sector and
Catholic Church have been inc¢asingly demanding that the
Gaviria government abandon itsidisastrous policy of dialogue
with the terrorists, and instead tmpose the rule of law. Said
the head of the Colombian ranchers' federation (Fedegan)
recently to an audience that intluded Gaviria, "Enough of
bowing our heads. No more guilt complexes. War cannot be
avoided. The terrorist wave of October must have a clear and
crushing response!" He reported that 700 ranchers had been
kidnaped and 154 killed in 1992 alone, on top of the millions
extorted by the terrorists. He �amed that cattlemen were
abandoning their ranches in reccbrd numbers in order to try to
save their own and their families' lives.
The head of the Colombian bishops' conference, Archbishop
Pedro Rubiano, called for an end to negotiating with
the narco-terrorists. Now, he said, "the only way out left to
the government is the exercise oif authority, putting the house
in order with a strong hand." i
"A 'pro-Fujimori' sentimedt is rapidly spreading, and is
no longer limited to the so-call�d oligarchic classes," wrote
the alarmed co-owner of El Tiempo newspaper, Enrique Santos
Calder6n, on Nov. 7. "In the middle and lower classes
one can hear that what we need lere is • a tough little Japanese
guy like in Peru, who can put an end to all this mess.' "
Colombians are fed up with a decade of dialogue and
negotiations with the different terrorist groups, and with the
multiple concessions that suc:cessive governments have
granted to the drug traffickers and their narco-terrorist allies.
During these past 10 years, every guerrilla group has grown
in number and armed strength: i
• The National Liberation Army (ELN) was a tiny group
made up largely of a handful of pro-Castro fanatics and a few
EIR November 20, 1992

"liberation theologians." Thanks to dialogue and the millions
paid them by the oil multinationals as "protection money,"
the ELN has become the scourge of the national economy
and is now on a major offensive to seize control of the major
oil and mining zones of the country. It is already known that
the ELN owns both gold and coal mines, through "legitimate"
fronts.
• The heads of the Colombian Revolutionary Armed
Forces (FARC), which until 1982 was largely a gang of
bandits run by the pro-Soviet Colombian Communist Party,
have since been elevated by the media to the category of
"statesmen" with whom one must discuss and negotiate government
policy.
• The People's Liberation Army (EPL), a Maoist creation,
also grew during the dialogues. Today, one part of the
EPL has "legalized" itself while another is in alliance with
the ELN and FARC.
• Finally, there is the M- 19. Notorious as the narcoterrorist
group which massacred half the Supreme Court during
its bloody siege of the Justice Palace in 1985, today the
M- 19 controls Gaviria's Health Ministry and is angling for
the presidency. The M-19 was legalized by presidential amnesty
in 1989 and has been inside the presidential cabinet
ever since Cesar Gaviria took office. The visible head of that
group, Antonio Navarro Wolf, today dedicates his efforts to
demanding "international mediation" for a negotiated
"peace" between the government and the terrorist groups.
The Gaviria government has shamelessly intervened on
numerous occasions to prevent the courts from charging the
M- 19 terrorists with their multiple crimes, and has even promoted
disciplinary investigations against those judges who
have dared to apply the law.
The price of capitulation
Of course, as can now be readily seen, the deals struck
between Gaviria's government and the drug traffickers have
reduced neither drug-trafficking nor the violence related to
it, nor have they prevented the so-called guerrilla groups
from financing themselves with drugs. What Gaviria's deals
with the narcos have accomplished is to lull the government
and society into an illusion of security, leading them to lower
their guard against narco-terrorism. Today it is paying the
price.
With the October death in a firefight with the police of
Brance Alexander Munoz Mosquera (a.k.a. "Tyson"), one
of the heads of the Medellin Cartel's "military" apparatus, the
Gaviria government's justly ridiculed "surrender to justice"
deal with the cartel was suspended. At least 20 policemen
were assassinated by the cartel's hitmen in Medellin and
surrounding areas in the course of a single week following
Tyson's death.
The dialogues and their consequences have demoralized
the Colombian population, already suffering the effects of
severe economic decline. While those over 40 years of age
EIR November 20 , 1992
complain that the government has bnly had time to listen to
and negotiate with the most brutal M criminals, a segment of
the youth population has drawn the : conclusion that to "make
it," it is not necessary to be educated, diligent, and disciplined,
but simply ruthless and violent. It is precisely through
the spread of this "culture of violence" that narco-terrorism
has been able to recruit and grow wwerful.
However, Fujimori' s successes! in Peru have managed to
swing the pendulum back toward the Peruvian model and
away from the so-called Salvadoran model, where the United
Nations and U.S. government have managed to blackmail the
Salvadoran government into handing the discredited FMLN
insurgency its quota of power. i
The Fujimori model is the only one that can possibly
work in Colombia, whose "guerrilla" movement coordinates
strategy with Peru's Shining Path. According to intelligence
sources, the Colombian terrorists hJlve held numerous meetings
with representatives of Shining Path, to coordinate actions
"in defense of the Peruvian revolution." The best defense,
insists Shining Path in I these meetings, is to
universalize the "revolution." Shilling Path is the most violent
group in Ibero-America, whiclt combines Maoism with
"Inca fundamentalism" that seeks to wipe out western culture
and return the continent to primitivism.
Recent brutal actions by the FARC and ELN show how
quickly they are coming to emulatj;: Shining Path. On Nov.
7, some 200 FARC-ELN terrori$ts massacred 26 police
agents who were guarding a state oijl installation in the southern
department of Putumayo. Previously, such attacks were
directed against the multinationals ,i as much to improve their
image as "anti-imperialist" as to facilitate the extraction of
protection money. This time, it w� property of the state oil
company Ecopetrol that was attaqked and completely destroyed
after the police guards wer¢ slaughtered.
Simultaneously, in the course �f just two days, they set
off more than 50 dynamite bombs at police posts, banks,
markets, and pipelines, causing the deaths of 50 people and
injuries to 70 more . According tQ II Army Division commander
Gen. Harold Bedoya, military intelligence has acquired
documents confirming thatl the ELN keeps a count
of how many legs they cut off frqm peasants suspected of
collaborating with the Army! I
The Gaviria government's reswnse to this latest terrorist
offensive will only prove effective! if the population obliges
the President to follow through 0Jl his word. In the past,
Gaviria has responded to the general clamor for action against
narco-terrorism with bombast ancll promises, designed to
calm the citizenry and pave the way for a renewal of dialogue.
Gaviria has always considered a military offensive a last
resort to force the terrorists to the negotiating table, and never
as a means of defeating them. Only by discarding the concept
of "dialogue" and "peace pacts" With these murderers can
Colombians hope to free themselyes of this nightmare of
instability and violence.
International 47

Interview: Gianni Cipriani
Italian magistrates seize list of
30,000 in sweeping probe of Masomy
During his imprisonment in the hands of the Red Brigades
terrorists in 1978, the Italian Christian Democratic leader
Aldo Moro wrote a memorandum. In those days, awaiting his
barbaric murder, the statesman, who was a personal friend of
Pope Paul VI and had been at various times prime minister,
foreign minister, and secretary of the ruling Christian Democratic
(DC) party, dwelt on the campaign organized against
him by the American embassy in Rome. He was very specific:
The orders had come from then-Secretary of State Henry
Kissinger. That memorandum was Moro' s final attempt to
leave an explanation of the operation targeted against him
and against Italy.
The memorandum has become a hot news item once
again, since the prosecutor of the town of Palmi Calabro,
Agostino Cordova, ordered the search of the central offices
of the Italian Masonry and many other lodges all over the
peninsula, which in some cases resulted in confiscation of
huge quantities of material. The unprecedented case started
with an investigation into the activities of the Calabrian mafia-the
N'drangheta-that led to the "masonic level," confirming
the conviction held by many magistrates that organized
crime and masonic lodges are often closely connected.
Furthermore, the connection to the U.S. Southern Jurisdiction
of the Scottish Rite Freemasonry-that of Gen. Albert
Pike-is coming out of several facets of the investigation,
including the discovery and search of the Albert Pike lodge
in San Mango d' Aquino in Calabria.
Gianni Cipriani, co-author of the book Sovranita Limitata
(Limited Sovereignty), has become one ofthe first journalists
to follow the new activities of the Masonry and the connection
with plans to destabilize Italy. With an eye toward
that investigation, Cipriani is re-reading Moro's memorandum.
"Moro knew that he had been excluded from the embassy's
receptions because there was a decision taken by Kissinger
to look toward a new generation of Christian
Democrats, young technocrats, able to speak English and to
transform the DC from a constituency-based party into a
party of lobbies. Among them Moro includes Mario Segni."
Fourteen years later, Mario Segni has become a formidable
power in Italy. Sponsored by the major media and the
whole Anglo-American apparatus, Segni has launched a fullscale
offensive against the establishment, against the "cor-
48 International
ruption" of the party system, and against the political party
conception of Aldo Moro. Segni's scheme is supported by
Claudio Martelli, the number two official of the Socialist
Party and present justice minister. Martelli has launched a
personal campaign against Judge Cordova, preventing him
from being tapped to be in ch�ge of the special agency set
up to carry out the fight against the Mafia. Also on the same
wavelength are Giorgio la Malfa, secretary of the small,
Anglophile, Republican Party, and the separatist North
League.
''Traditional parties are in a crisis," declared the Grand
Master of the Italian Masonry, Giacomo Di Bernardo. "People
like Segni can be a solution, yes, people like Segni and
Martelli. "
Umberto Pascali spoke wi� Cipriani by telephone at his
Rome office. Excerpts of the interview, which was conducted
in Italian, follow.
(Item. It may be helpful tOI American readers to explain
the term "Black Masonry." In iItaly, this refers not to racial
divisions within the Masonry as in the United States, but to
affinities to Fascism, since Mussolini's Fascism used the
color black as its symbol, such as the "black shirts" of the
Fascist private militias. Of course, Licio Gelli, the Venerable
Master of the secret Propaganda-2 lodge, partially pushed
into the limelight in 1981, waS both an important official in
Mussolini's Republic in North¢rn Italy and at the same time
an agent for Anglo-American intelligence.)
EIR: Mr. Cipriani, how did the investigation start?
Cipriani: Judge Cordova's inVestigation started around one
year ago. At the beginning, Cordova was focusing on the
activities of organized crime, especililly the Calabrian mafia,
the N'drangheta. Following this, around one month ago, he
discovered evidence of the connection between organized
crime and some masonic lodges. He found out that the "business
committees" of the N' dra�gheta, which managed public
contracts, were in contact witll the Masonry. Some ex-Masons
and some ex-mafiosi tumed state's evidence, testified
to the existence of this link, in the sense that Masonry was
one of the pillars of the interconnection between Mafia, politics,
and business. There was irtdeed this masonic mediation.
Amid the evidence there are also audiotapes of phone
. EIR November 20, 1992

conversations that show clearly the link between [the former
head of the formally dismantled P-2 lodge] Licio Gelli and
representatives of organized crime. I want to stress though,
that the problem is not only Gelli. We should not focus just
on him. He is discredited, he is known to the public. He was
the puppet master of many dark events in the 1970s and
beginning of the 1980s, he was involved in the [Aug. 2,
1980] bombing massacre at the Bologna train station. But I
think there are other, less known figures. In my opinion,
perhaps the merit of Cordova's investigation is that it will
help discover the Gellis of the 1980s and '90s. Who are those
powerful masonic leaders who, having remained always in
the shadow, were able to continue to proliferate? We have
identified some of them, but of course I cannot mentionfor
the moment-the names.
EIR: How did Cordova proceed?
Cipriani: Starting with this information on the Mafia-Masonry
connection, which I do not know because it is still
under judicial secrecy, Judge Cordova decided that this track
had to be followed and began a blanket investigation of Masonry
. Now Masonry is formally a legal organization. There
is also a law, though, which was approved after the P-2
scandal, the so-called Anselmi Law , that prohibits the existence
of secret lodges and establishes some rules for Masonry
. Italian law does not grant the Masonry the right to secrecy,
though they can use riservatezza [privacy] . By playing on
this ambiguity, many secret lodges were created. In fact,
from what one could gather, Cordova's investigation discovered
the existence of many covert lodges, i.e., entities that
are totally illegal vis-a-vis Italian law.
So, he ordered searches and seizures all over Italy. First
of all, he asked for the lists of all the members of Masonry
of the Grand Orient of Italy, the so-called regular Masonry
of Palazzo Giustiniani connected to the Grand United Lodge
of the Duke of Kent [in England] . After some resistance, the
lists were delivered. At the same time, he sent police and
Carabinieri [military police] to the local offices of Masonry
to check the lists. After that, he checked the offices of the
other major masonic branch in Italy, the one of Piazza del
Gesil, which is at the center ofthe present investigation. Also
for this case, he ordered a series of seizures in the houses of
lodge members . Then, following the confessions of certain
witnesses, he seized certain safe deposit boxes and checked
some banking accounts. At this point, Cordova is being
helped by a pool of magistrates known for their determination
to go after the Mafia and political destabilizations. The pool
includes Felice Casson, the magistrate who launched the
investigation into the secret paramilitary network codenamed
Gladio; and Gherardo Colombo, who stood up to overwhelming
pressures and conducted the search and seal of Gelli' s
Villa Wanda in 1981.
The magistrates have in their hands a huge mass of seized
material . Just to give an idea, they have lists of 18,400 names
EIR November 20, 1992
from the Masonry of Palazzo Gi�tiniani' 6,000 from Piazza
del Gesil, plus others for a total of 0,000 names. The material
fills a big room in a Roman b acks that is being watched
day and night and whose name is! kept secret, because very
powerful forces are interested in db stroying that evidence.
I
I
EIR: It was reported that Corddva succeeded in breaking
the code of Masonry computer's '\'rotected area. "
Cipriani: Yes, he was successfJi in that. He had a hunch
that a particularly smart technicianlhad managed to hide some
files in the computer of the Grand Qrient of Palazzo Giustiniani.
So the computer was put un!' er police guard and two
specialists were sent by Cordova. hey found the "protected"
list. It seems that during the first hase at least three covert,
i. e. , illegal, lodges were discoverqi, the heads of which were
very important figures, two of them already members of the
P-2 in the past and the third being a top leader of the Grand
Orient itself. Of course this intelligence has not yet been
confirmed. It has also been reported in the Italian press that
many documents have been found concerning the Colosseum
lodge . .. .
. EIR: The Rome-based Colosseum. lodge had already been
mentioned during the investigations into the P-2 10dge. It has
been reported that it's one of th� most powerful lodges in
Europe. It had even been dissolveCli, at least officially, by the
Grand Orient a few months ago, �nd seems to be connected
to the U.S. Southern Jurisdictioq of the Scottish Rite, the
Masonry of the Albert Pike tradition.
Cipriani: The Colosseum is a IQdge that includes several
employees of the U. S. embassy in Italy. It has been defined
as a lodge with a high CIA presenqe. The name of the Colosseum
popped up during the P-2 i inquiry, but this did not
stop it; it continued to function, ",sing the name Center for
Historical Studies. Colosseum i� not a secret lodge, it is
official; the only problem is that nobody knows what really
was going on there , and who wer� the real members . In the
Colosseum, Elvio Sciubba also us�d to play a role. He is the
Grand Commander of the Scottish Rite who is the correspondent
in Italy of the U.S. Southern Jurisdiction. Sciubba has
been in the past months one of thlt main ambassadors of the
Southern Jurisdiction to countries! of eastern Europe, where
the Scottish Rite has been exported over the last years.
It will be very interesting to S(!!e what really was happening
inside the Colosseum, if doc�ments have been found.
Last May the lodge was, at least formally, dissolved by the
Grand Orient, by the Grand Mast¢r De Bernardo. Officially
this happened because of irregularities in the management,
but there may be other reasons. In any case, the Colosseum
continued its activity as usual. But what is happening around
the Colosseum, seems to indicate a certain split inside the
Masonry.
EIR: What sort of split?
International 49

Back in the news: Henry Kissinger, whose Italian masonic friends
want to replace the fo rmer U.S. -Soviet bipolar order with Anglo­
American hegemony, crushing any autonomy fo r Europe or
Japan .
Cipriani: We shouldn't see the Masonry as monolithic.
First of all, there are some minor divisions among local
lodges for reasons of business rivalry . But I believe that the
whole Masonry underwent a split for strategic reasons after
the fall of the Berlin Wall. On one side there is what we
called the Black Masonry, the continuation of the P-2, which
is an emanation of the Anglo-American Masonry. This group
has worked to substitute for the former U. S. -Soviet bipolar
world, a sort of new world order, an Anglo-American hegemony,
against any autonomous role for Europe or Japan. On
the other side there is the faction we could call Europeanist,
not because they are totally against the Anglo-Americansnobody
in the Masonry really is-but because they are trying
to find forms that would make it less dependent-for everything-on
Anglo-American interests.
The Black Masonry has worked to export to the countries
of eastern Europe a super free market line, to introduce shock
therapy capitalism that it seems to me has caused big troubles
there.
EIR: You are the author, with your brother Antonio, of the
book Limited Sovereignty, in which you have described the
subordination of Italy to Anglo-American power and to the
Yalta game. Is the attention you gave to the masonic destabilization
of Italy a consequence of this work?
Cipriani: Indeed it is, because we know that the masonic
phenomenon, the P-2 phenomenon, has been one of the instruments
to keep Italy under a limited sovereignty. Of
course, Italy's limited sovereignty is a documented fact. For
example, it seems to me that it is particularly interesting to
re-read the Plan for a Democratic Rebirth, drawn up by Licio
Gelli.
["The Plan for a Democratic Rebirth," also known as the
"Memorandum on the Italian Situation," is a 22-page report
50 International
prepared in 1976 by Licio Gelli. It was seized five years later
by the magistracy who searched Gelli's villa in Castiglion
Fibocchi near Arezzo. Gelli, it as discovered, was at the
center with his covert P-2 lodge for activities in political ,
criminal, and terrorist destabiliza ion. The plan was a blue­
print for a final destabilization. It reads in part: "In other
countries and in other times (Ita I 1922, Russia 1917, Ger­
many 1933, Spain 1936) the concdmitance of moral , political
and economic crisis led to the inl tallation of iron regimes .
. . . We cannot imagine how Ital can escape such inelucta­
ble destiny." The plan proposes t�e elimination of the politi­
cal parties, to be replaced by "temtorial and sectorial clubs,"
and by pushing for a forced politiCfl bipolarity, allowing only
"two political movements, one of social-labor inspiration and
the other moderate-conservative.' It also called for a general
reorganization of the media along the same lines. The magistracy
is indicated as a necessary te ain of activity and recruiting
for the P-2-ed.]
EIR: Gelli's plan was written long ago.
Cipriani: Yes, but it is the saml as in the case of Moro's
last memorandum. He was wa�ing against Kissinger's
plans, and then 14 years later w ' se� that those plans look
more and more like the political reality of the day. In the
same way, 16 years after Gelli's Ian, it seems to me that it
is more real than ever. Just as an Jxample, it is interesting to
read how Gelli stresses the neces ity of introducing corruption
into the political parties. Today, in Italy, we have this
huge scandal that has involved �asically every party. So
many politicians have been ind cted for having accepted
bribes, not for themselves, but for their party. Suddenly it is
being discovered that basically ev�ry party functions through
a system of illegal fundings, taki g bribes on state-financed
f
works. This scandal has been th most efficient instrument
1
for those who try to undermine an� discredit the party system,
substituting it with power lobbies, and with two formally
opposed political formations, in a ituation in which whoever
controls the financial power wo ld have direct control, no
longer mediated . I think it was Rf:ckefeller who said: "Vote
for whomever you want, you wil always vote for us."
You must also consider th t historically the Anglo­
Americans never totally trusted Ithe Christian Democracy.
They would have preferred the men of the minor parties,
which are more controllable, li
t
e the RepUblican , or the
Liberal Party , but, given the fommunist-anticommunist
counterposition of the postwar Ifriod, they had to make a
deal with the DC. Christian DetOCracy was a very strong
party, with real , popular suppo , linked to the Catholic
Church, and the Catholic Churc in Italy has influence. Today,
when a bipolar system is bei g considered obsolete, the
Anglo-Americans want to drop t at party. Only a part of the
DC enjoyed the total confidence of the Anglo-Americans.
And today we see that the stronge t attacks against the Anglo-
Americans come precisely from

Andean Report by Alfonso Rodriguez
CAP spurns confidence vote
The Anglo-Americans' champion of "democracy" rejected a
Senate ruling and defied a constitutional order.
On Nov. 5, Venezuelan President
Carlos Andres Perez (or CAP, as he is
known) rejected a Senate ruling that
requires him to include on the ballot
for the Dec . 6 election of mayors and
governors , a "yes/no" referendum on
whether the population wants him to
remain in the presidency. CAP's response
was given within hours of the
Senate vote; in announcing it on national
television, the President took
the unusual step of requiring the presence
of the entire military command
at his side.
The Senate ruling, authored by
Social Christian party (COPEI) Sen.
Pedro Pablo Aguilar, responded less
to the demands of the population for
an end to CAP's rule than to the desperation
of the Venezuelan political
establishment to forestall a coup. If
the referendum is not included in the
Dec . 6 election, estimates are that abstentionism
will be in the range of
80% or greater. By including the referendum,
some hoped to channel this
disenchantment to the polls. The population
would be given their opportunity
to boot CAP out of office, but the
political system which spawned him
would be saved.
CAP's rejection of the Senate's
"vote of confidence" ruling has thus
created an institutional crisis only
comparable to the failed military coup
of Feb . 4. In Aguilar's view, CAP's
refusal to abide by the vote is made
even more serious by the fact that he
denounced the vote as "unconstitutional."
According to the Venezuelan
Constitution, only the judiciary can
determine whether or not a measure
is constitutional . Thus, says Aguilar,
EIR November 20, 1992
CAP not only repudiated a decision
of the Senate, but also "usurped" the
functions of the Supreme Court.
Further, by insisting on the military
command's presence during his
rejection of the Senate ruling, CAP,
in Aguilar's view, was also "abusing"
his position as supreme commander of
the Armed Forces.
It is ironic that the greater the effort
the United States government
makes to keep CAP in power, the
more there are demonstrations against
him in his own country. On Oct. 21,
U. S. Ambassador to the Organization
of American States Luigi Einaudi told
a select audience of the Washingtonbased
Woodrow Wilson Center that
"Venezuela has a President with personal
charisma, history, a potential of
external reality . . . [who] still projects
vigor, courage, modernity,
adaptability. "
Einaudi concluded with a warning
that "if there is any interruption [of his
mandate] , let me assure you all that
there will be . . . a whole range of
reactions, which will make business
as usual impossible."
And yet on the very night of the
Senate vote, Venezuelans in several
parts of the capital city jubilantly celebrated
the decision with pot-banging
and fireworks.
What nervous elements of the political
establishment apparently hoped
to accomplish with Aguilar's proposal
is that, by bringing about CAP's resignation
"democratically," there can be
a peaceful way out of the current crisis
in Venezuela. Declared Aguilar, "The
worst tragedy that could happen
would be a combination of violence,
anarchy, and the inability of the state
to guarantee public order. It would be
something like ,a civil war, of an unprecedented
soft that could better be
called 'bloody ltJlarchy.' "
Aguilar's pk-oposal implicitly requires
that CAiP resign following a
vote of no confidence. According to
Aguilar, CAP Would be immediately
replaced by the president of the Congress,
who would then call on Congress
to name an independent to fill
out the remainder of the term and initiate
reforms, including election of a
Constituent Assembly.
Should the referendum take place,
of course, the political dynamic in the
country would : be dramatically altered.
This reality has triggered factional
brawls within the political
parties.
For example, Andres Velazquez,
leader of the leftist Causa R party, had
rejected Aguilar's proposal two days
before the Senate vote, during a visit
to U.S. Ambassador Michael Skol's
home in Caracas where he went to
watch the U.S. election returns.
Velazquez" who is hopeful of improved
relations with the United
States under a Clinton presidency, has
presidential aspirations for 1993.
Causa R Secretiry General Pablo Medina
has already advanced the idea of
requesting the �sence of international
observers, including former U.S.
President Jimmy Carter, French President
Fran�ois Mitterrand, the head of
Brazil's Workers Party "Lula," and
Mexico's Cuautttemoc Cardenas. The
last two, like Causa R, are affiliated
with the Cuba-spawned Sao Paulo Forum,
a continental collection of leftist
parties.
But Causa iR's representative to
Venezuela's Supreme Electoral
Council has baltked the Senate ruling,
and has alreadt convoked an urgent
meeting of the �ouncil to plan how to
implement the referendum.
International 51

International Intelligence
In Soviet republics,
'a storm is gathering'
An editorial in the Times of London on Nov.
2 draws attention to the crisis in the former
Soviet republics, which is being blissfully
ignored in the West. The article is titled "The
Bear's Troubles: Eastward the Land Is Dark,
and Growing Darker."
"Europe has been bogged down by
Maastricht, America by its elections, and
both have not looked beyond the conflict in
Yugoslavia," the article says. "But further
East a mighty storm is gathering."
President Boris Yeltsin is being "cornered
by his enemies," who want to return
Russia to "evil totalitarianism," while "failure
stares his reform government in the face.
Hyperinflation has impoverished the nation.
The stench of fascism rises from the crowds
who parade their ethnic hatreds and jeer at
Russia's fledgling democracy. . . . The
President's popular support is falling rapidly,
as the country slides into ungovernability
. . . . His room for maneuver is growing
ever less, the influence of his opponents ever
greater."
But side by side with these dramatic
words , the editorial hints at sympathy for
the International Monetary Fund and other
"monetarist reforms" in Russia, so the British
elites have only themselves to blame, if
they are now worried about what will happen
in Russia.
Will Britain make
Malvinas a new state ?
A leader of Argentina's Constitutional Nationalist
Party, Alberto Assef, charges that
a secret plan is under way, "promoted by
London, to design the future of the Malvinas
[Islands] , the Antarctic, and the South Atlantic
." According to the periodical El lnformador
Publico, Assef said, "Britain has
decided that the Malvinas will be the beachhead
of a new independent state, which will
extend 3,000 km to the south, reaching the
Pole, 2,000 km to the southeast to the South
Sandwich Islands."
52 International
These plans are developing at the same
time that Argentina is trying to join NATO
and to create a South Atlantic Treaty Organization,
with several European and Southern
Cone nations.
The plan described by Assef would include
areas historically claimed by Argentina.
However, the extension south to the Antarctic
would constitute a further British
claim over a portion of this much-coveted
region, rich in mineral wealth and oil. Under
anyone else but President Carlos Menem,
this would be taken as a direct threat to Argentina's
national security. But Menem is
busy handing over sovereignty to the British
as fast as he can.
Vatican, Israel talks
move toward recognition
The possibility of formal diplomatic relations
between the state ofIsrael and the Holy
See is not dependent on final agreement on
such "political issues" as the status of Jerusalem,
the Vatican's top diplomat in Israel
told the Jerusalem Post on Oct. 17. Archbishop
Andrea Cordero Lanza di Montezemolo,
the apostolic delegate to Jerusalem,
gave the first ever interview by any apostolic
delegate to any Israeli paper.
Montezemolo reported that the Holy See
and Israeli government have been holding
"confidential meetings" for more than a
year, intended to possibly "normalize relations
between the Holy See and Israel." He
was asked about ajoint letter issued in July,
signed by the Latin Patriach of Jerusalem
Michael Saba, the Grand Mufti, the Anglican
archbisliop, and the head of the Greek
Catholic Church, which asserted that any
discussions between the Holy See and Israel
must "naturally touch the status of Jerusalem."
Montezemolo said the letter reflected
a misunderstanding.
At the end of October, Israeli Foreign
Minister Shimon Peres met with Pope John
Paul II at the Vatican. Following the meeting,
the Vatican sent special envoys to Amman
to meet with the Jordanian government,
and also met with a Palestine Liberation Organization
delegation in Rome.
Commejl1ting on the negotiations, Anti­
Defamation League Director of Inter-Reli­
gious Affairs Rabbi David Rosen told the
Jerusalem Post that it would be a mistake if
the Israelis now demand too much from the
Vatican-f�r example, a commitment to
eradicate ar\ti-Semitism among Catholics in
eastern Eurppe. Instead, Israel should stick
to political , issues. "It is far more in our
interest to *engthen the hands of the Sons
of Light in ¢e Vatican and go ahead with all
issues that rj:late between states," he told the
paper.
I
Inactio� on Somalia,
Bosniaiis 'inexcusable'
The current!inaction by the world community
in the face of the crises in Somalia and
Bosnia is inexcusable, the president of the
Internation/l-I Committee of the Red Cross
said in Thnll; on Nov. 3. ICRC chief Cornelio
Sommaruga criticized the nations of the
world for f�iling to intervene in Bosnia to
prevent att�cks on civilians and relief convoys:
"In yugoslavia, what governments
should havp done was to prevent attacks
against the : population. How can such an
ethnic eliIfjination have been perpetrated
w�t� � u� an,t intervention? . . . Yes, I am
cntlclzmg' l
On Son;lalia, he said: "The community
of states sh�uld take its responsibilities and
implement the embargo decreed on arms entry
to Soma/.ia. This is an appeal . Is it possible
that with such a situation in Somalia,
arms and ammunition can enter this country?
The iJilternational community should
also act urgently to get the parties around a
table for reqonciliation and reconstruction."
Mohamed Sahnoun, an Algerian diplomat,
resign¢d the week before as the U.N.'s
special env�y to Somalia, criticizing the donothing
attitude of the United Nations.
Europe is moving to
restrict immigration
,
The interiOl! ministers of the European Community
(EC) have drawn up a scheme for
EIR November 20, 1992
,"

estricting immigration into Europe, under
the rubric of "harmonizing policy toward
asylum seekers," the British Broadcasting
Corp. reported on Oct. 22 . British Home
Secretary Kenneth Clarke denied the existence
of the plan, but senior political figures
interviewed by BBC expressed belief that
something along these lines is under discussion.
According to BBC's Brussels correspondent,
the new guidelines would "deny
refugee status for those trying to escape
from civil wars," and to those coming into
Europe from "another continent." Those
coming to Europe claiming to be escaping
political persecution would have to "seek
redress in their own country first," a truly
breathtaking demand.
At least four groups within the EC structure
are now working on the question of
asylum, refugees, and migration. Senior intelligence
sources in Europe have told EJR
that draconian legal guidelines are first
needed, so that military deployments to
stem the flow of refugees can then be set
into motion. The British, in particular, have
been pushing for harsher measures, with
Foreign Secretary Douglas Hurd having
stated repeatedly that the main threat facing
Europe would be from "refugees and migrations."
The British currently occupy the
presidency of the EC.
Britain cancels military
exercises in Hong Kong
Great Britain has called off scheduled military
exercises in Hong Kong, which were to
have simulated a Chinese invasion of the
colony, the British Broadcasting Corp. reported
on Nov. 5. The decision to call off
the exercises, which would have been only
classroom simulations, was to prevent any
further tensions with Beijing, already exacerbated
by quarrels between Hong Kong
Gov. Chris Patten and the Chinese government.
A British military spokesman said, "It
was a decision by Her Majesty's government,
and it was felt that it wasn't the best
time to hold an exercise of this nature." He
EIR November 20, 1992
said that 150 soldiers and technicians of the
Fifth Airborne Brigade were to have been
shipped out from Britain for the command
exercise.
The plan was stopped when newspapers
leaked that the exercise was to be based on
a scenario involving a breakdown in Sino­
British ties and an incursion by Chinese
troops. Mainland Chinese patrol boats have
been entering Hong Kong waters in recent
months, and there has been at least one
armed face-off between marine officials
from both sides. Chinese officials have
boarded and hijacked more than a dozen
ships leaving Hong Kong waters recently,
confiscating goods they claimed were contraband.
Turkish Islamic party
wins in local elections
Necmettin Erbakan's Welfare Party took
control of 5 of 20 districts contested in local
elections in Turkey on Nov. I. Four of the
five victories were in the province of Istanbul.
"Welfare Party Shock in Istanbul," was
the headline in the widely read daily Hurriyet.
'The question of whether Turkey is entering
an 'Algerian syndrome' can come to the
minds of many people," the paper reported.
The party took 24 .5% of more than 500,000
votes cast.
The main opposition Motherland Party
won in four municipalities with 22.8% of
the vote. Prime Minister SUleyman Demirel's
True Path Party took 16.7% and won
in eight districts. Its coalition partner, the
Social Democrat Populist Party, took 19.2%
and three districts.
The Welfare Party advocates forming an
Islamic state and overturning the secular tradition
of Mustafa Kemal Ataturk, the founder
of modem Turkey. It has condemned
Turkish involvement in the war with Iraq;
Turkish intervention into northern Iraq; and
the presence of U.S. troops on Turkish soil
since the war. Such positions, as well as
its condemnation of International Monetary
Fund privatization programs, probably account
for part of its popularity.
• IRAQI OPPOSITION parties
decided at the beginning of Novem­
ber to form a "temporary Iraqi gov­
ernment," ht1lldquartered in London.
While the "government" of squab­
bling parties is expected to rapidly
fissure , its official establishment provides
the c(mtext for the Anglo­
Americans tq recognize it as the "le­
gitimate" goVernment of Iraq.
• THE VATICAN newspaper
L'Osservato � e Romano on Nov. 7
urged Bill CHnton against promoting
abortion and euthanasia: "Do not
ever let freedom be deformed into
devastating models of behavior elevated
to nOrnls oflife, nor into license
to strike the weakest, from yet unborn
infants to the elderly on the margins
of society. . • ."
I
• BRIT AIIN'S Prime Ministerlohn
Major squeal

�ITillReviews
'The lamps are going
out all over Europe'
by Stuart Rosenblatt
Dreadnought: Britain. Germany. and the
Coming of the Great War
by Robert K. Massie
Ballentine Books, New York, 1992
1,007 pages, paperbound, $14
As the world plunges toward another Dark Age, it is critical
to examine the root causes of today's crisis, which can be
traced efficiently to the period from the U.S. Civil War to
the outbreak of World War I. Unfortunately the United States
has never understood the lessons of the Civil War, i.e., the
resurgence of British-inspired Confederate policy in the late
19th century, as a result of which the United States entered
World War I on the side of our historic enemies! (See EIR,
Nov. 6, "LaRouche Broadcast: 'We Wrestle against Principalities
and Powers.' ") Unless we unravel the wrongheadedness
that led into the First World War, and extirpate all
vestiges of Anglo-inspired foreign and domestic policy, the
U.S. as a nation is doomed, and a third world war our future.
Robert Massie's Dreadnought allows us to study the
events leading into World War I from the vantage point of
an American who is pro-British, and we can therefore use it
to draw the opposite conclusions from Massie, as to the
causes and culprits for the war.
From the outset, Massie tries to legitimize British actions
according to the Alfred J. Mahan interpretation of the 1850-
1914 period: "In 1890, an American naval officer, more
scholar than sea dog, codified the Briton's intuitive sense of
the relationship between sea power, prosperity, and national
greatness. In The Influence of Sea Power upon History, Alfred
Thayer Mahan traced the rise and fall of maritime powers
54 Reviews
in the past and demonstrated tpat the state which controlled
the seas controlled its own f�e; those which lacked naval
mastery, were doomed to defeat or the second rank. . . .
From the metaphor arose an itnperative: to patrol the common,
a policeman was needed! to protect shipping and trade
routes, maritime powers requi � ed navies."
Massie introduces his thre r -pronged thesis in the introduction:
1) British sea power was the guardian of the empire
and implicitly the world and t:ij.is global policing was necessary.
2) When Germany, in particular, began to catch up to
England in naval power, bal�ce-of-power theory dictated
the necessity of an alliance of Britain, France, and Russia
against it. 3) Germany should pave realized that violation of
this scheme would lead to war j Despite Massie's attempts to
force events to conform to hisithesis, his ample historiography
allows the careful reader t� gain tremendous insight into
the real tum of events.
Sunset on the empire i
Britain created and maintatned its empire throughout the
19th century at the point of a �un-its Navy-and through
the spread of anti-industry "ftee trade" policies to halt the
growth of rival nations. How,ver, this policy began to fail
by the second half of the centqry as Germany, France, Russia,
and the United States mliPe remarkable strides toward
industrialization by their application of American System
programs of rapid scientific an� technological progress, coupled
with protectionist trade p�licies. This growing threat to
British global domination ca�sed the empire to jettison its
time-honored "Splendid Isolatlon" from affairs on the European
continent, and to launchl a full-blown encirclement of
its major rival, Germany. Thi� gambit was accomplished by
the successful manipulation of bitter enemies France, Russia,
Japan and the United States iI1to an anti-German, anti-Austro-Hungarian
entente.
EIR November 20, 1992

Massie details quite well what Britain looked like from
the inside and highlights the little-acknowledged French surrender
at Fashoda in Sudan in 1898 as crucial to the process.
He also provides excellent quotes from the treacherous
French Foreign Minister Theophile Delcasse on his surrender
to British superiority. When Delcasse took over as foreign
minister at Quai d'Orsay, Massie reports , "he had a personal
goal. 'I do not wish to leave this desk,' he told a friend,
'without having established an entente with England.' "
Following the Fashoda surrender, France-Britain's enemy
for centuries-became an ally. Massie then documents
the manipulation of another British rival-Russia-into the
British camp. In the process, he also exposes the fact that
England had deep-seated fears that Russia and China would
come together around Russian Foreign Minister Count Sergei
Witte's ambitious rail and infrastructure program, and that
Russia's eastward expansion might sever England's link to
India, the "Jewel in the Crown." "In private, Queen Victoria
described Tsar Alexander III as 'barbaric, Asiatic, and tyrannical.'
Conservatives feared Russia thrusting towards the
Dardanelles, into the Far East, against the frontiers of India,
through Persia towards the Gulf. Liberals rejected the Russian
autocracy as anti-democratic. Britain's first step away
from Splendid Isolation had been the alliance with Japan, a
treaty specifically aimed at containing Imperial Russia."
The entente with Russia that was consolidated was hardly
a "community of principle."
Massie also depicts events and personalities inside the
degenerate court of Kaiser Wilhelm II that facilitated the
British encirclement. He unmasks key advisers such as First
Counselor Friedrich von Holstein, Count Paul Wolff Metternich
and Prince Karl Lichnowsky as likely agents or at least
pawns in the British Great Game. For example, Massie describes
Holstein's maneuverings, which led Germany away
from renewing its Reinsurance Treaty alliance with Russia
in the late 1880s. This stratagem paved the way for Russia's
unlikely embrace of previous enemies France and England,
a move that would have been inconceivable for Holstein's
previous master, Otto von Bismarck.
Jacky Fisher and the 'Dreadnought'
Once the encirclement of Germany is completed, and the
United States and Japan are towed into the new alignment,
Massie proceeds to document the rise of mercurial Jacky Fisher
and the new Royal Navy in the 20th century, and its pivotal
role in events leading toward war. Fisher was the architect of
the new Dreadnought battleship, whose oil-powered turbine
engine allowed it to carry very big guns that could fire from
over the horizon. His name was synonymous with rebuilding
the British fleet and with war against Germany. Massie provides
quote after quote from Fisher on the deliberate targeting of
Germany as England's only adversary from 1902 onward, such
as the following scenario of Fisher's:
"Fisher was convinced throughout his term as First Sea
EIR November 20, 1992
Lord of the inevitability of war with Germany. . . . Fisher
thought that the Germans would choose a weekend, probably
a weekend with a bank holiday. He had no difficulty pinpointing
the date, the name of the British admiral, and the
name of the battle in which Britain'8 future would be decided.
'Jellicoe to be Admiralissimo on ' Oct. 21, 1914 when the
Battle of Armageddon comes along, , he wrote in 1911. Fisher's
premise and most of the details of his prediction were
correct. He picked the date because it corresponded with the
probable completion of the deepening of the Kiel Canal,
which would permit the passage of German dreadnoughts
from the Baltic to the North Sea. :War did come on a bank
holiday weekend, although it was in August, not October,
1914. (The Kiel Canal had been cbmpleted in JUly.) At the
Battle of Armageddon, which was !;he Battle of Jutland, when
the whole strength of the German ijigh Seas Fleet was hurled
against the Royal Navy, the Commander-in-Chief of the
Grand Fleet was Sir John Jellicoe. Jellicoe was in command
because, over the years, Fisher had guided his career and
insisted that no one else would do."
As war became inevitable, Massie details, the British ruling
class stepped up its preparation of cultural and psychological
warfare against the British people to prepare them. He systematically
goes through the contrived "hledia events" of 1908-12
that paved the way for combat. An example, among the numerous
pulp novels that appeared in those years, was the "futuristic"
The Invasion of 1910 by William Le Queux.
". . . On both sides, the war was fought with ferocity.
"The Germans are monsters who bayonet women and
children, force terrified citizens to dig their own graves, and,
in retaliation for the ambush of a German supply party,
slaughter the entire population of an English town. The Kaiser
is not a 'splendid chap,' but a bloodthirsty barbarian who
craves the bombardment and sacking of London.
" 'The pride of these English must be broken,' commands
the All Highest. The Englisb are almost as brutal: Any
German who falls into their hands is shot stabbed, hanged,
or garrotted."
Massie's final chapters reveal many of the machinations
of Foreign Secretary Edward Lord Grey, who transformed
the Serbian-authored assassination of Archduke Franz Ferdinand
into the detonation of European genocide. While the
crisis around the murder was crescendoing, Massie writes,
Grey failed to brief the British cabinet, despite the fact that
he was monitoring all European communiques. The British
government was not advised about the situation until one
week prior to the German dec1aratin of war. In Grey's mind,
the trap of war against Germany, icarefully plotted for over
15 years, had been sprung. Massie concludes his book with
Grey's lament on the inevitabiliw of it all: After delivering
his ultimatum to Germany to halt its mobilization, Grey "uttered
the lines which memorably signaled the coming of the
First World War. 'The lamps are going out all over Europe.
We shall not see them lit again in our lifetime.' "
Reviews 55

Portrait gallery features exhibit
on Hamilton-Jefferson debat�
by Paul Goldstein
"The Spirit of Party": Hamilton and
Jefferson at Odds
by Margaret C.S. Christman
National Portrait Gallery, Washington, D.C., 1992
64 pages, paperbound, $12.95
One of the more intriguing and interesting exhibitions now
on display at the Smithsonian Institution's National Portrait
Gallery is "The Spirit of Party": Hamilton and Jefferson at
Odds. The exhibition, which opened Sept. 11 and lasts until
Feb. 7, presents an examination of the critical political battles
fought at the founding of the republic. Using Gilbert Stuart
and John Trumbull's portraits of the Founding Fathers as a
focal point, the exhibition also lays out, through documents,
political cartoons, personal letters, and etchings, the essential
political and philosophical struggle between the outlook of
Alexander Hamilton and Thomas Jefferson.
"The Spirit of Party," Alexander Hamilton's famous
quote taken from a letter written to William Short on Feb . 5,
1793, was chosen as the title to represent the political and
philosophical differences between Hamilton and Jefferson.
The exhibition is divided into two rooms and spans the historical
period of 1790- 1 800. The author of the exhibition, Margaret
C.S. Christman, draws attention to the momentous
struggle to establish the First National Bank of the United
States and the subsequent developments surrounding the
young republic's foreign and domestic policies. In the display
of two newspapers, The Gazette of the United States
(Federalist) and The National Gazette (Republican), coverage
of the debate surrounding the founding of the National
.Bank is laid out.
The exhibition's catalogue even discusses the Jeffersonian
charges that Hamilton modeled the National Bank on the
Britain's central bank, the Bank of England. Foolish and
dangerous as those charges are against Hamilton, nevertheless,
in the foreword of the "The Spirit of Party," director
Alan Fern of the National Portrait Gallery cites the reason
why Jeffersonianism has dominated American history. Fern
quotes historian Forrest McDonald: "Most of American history
was written by New England Yankees who, except for
56 Reviews
descendants of John Adams, almost uniformly idolized Jefferson."
I
McDonald also charges thl¢ the "Hamiltonians viewed
Jefferson's approach as overly �avoring rural America, with
its dependence upon market re.traints, reliance upon slave
. labor and weakening of the central government through excessive
favoring of the rights pf the states." Jeffersonian
governance, he says, fostered dependence and lawlessness,
"governed by coercion and party spirit, but Jefferson's view
prevailed, especially in the Soutjh, until the Civil War forced
the issue."
i
Jefferson's philosophicall 'trinity'
In a limited way, McDonal�'s view of the struggle correctly
identifies the problem. HIowever, it is the underlying
philosophical problem of Jefferion which defines the nature
of the problem. Nowhere is thi� more clearly exposed than
in Jefferson's Jan. 16, 1811 leitter to Dr. Benjamin Rush.
Situated in the second room of the exhibition, Jefferson's
letter discusses his philosophic41 differences with Hamilton
and goes on to declare that Joh� Locke, Isaac Newton, and
Francis Bacon were the basis M his philosophical foundations.
"They were my trinity or the three greatest men the
world has ever produced."
What Jefferson reveals is nqt only that his philosophical
outlook was part of the "Enligh¢nment" attack on the Christian
view of man , but also that h�s outlook was shaped by the
Venetian Party of England, Fra�ce, and Switzerland, which
sought to subvert the principles of the republic. Ironically,
Jefferson's actions during crise$ betrayed those very principles
to the furthering of the nati�n's development.
Though Hamilton is falsely �ccused of being a "tool of the
monied interests" the reality is qpite different, with Jefferson
actually being the one manipul�ted by the Venetian Partythe
usurious class. In fact, the Venetian-Swiss agent Albert
Gallatin is presented as represc:nting the opposite view of
Hamilton's economic program. Gallatin's pamphlet "A
Sketch of the Finances of the United States" is also on display.
Jefferson not only appoi�ted Gallatin as secretary of
the treasury during his administtation, but aligned with Gallatin's
seditious actions in theirtsupport of the Whiskey Re-
i
bellion.
Perhaps the most telling a�pect of this Venetian Party
EIR November 20, 1992
•

•
The Providential Detection ca . 1800. Engraving by an unidentified
artist. The exhibition catalogue explains the cartoon: "In the nick
of time, the federal eagle prevents Thomas Jefferson from
sacrificing the Constitution upon the 'Altar of Gallic Despotism.'
The document labeled 'Mazzei' refers to a letter that Jefferson
wrote his Italian friend Philip Mazzei, deploring 'men who were
Solomons in council, and Samsons in combat, but whose hair has
been cut off by the whore England' -which the Federalists
trumpeted as a pointed insult to Washington ."
outlook is the cartoon lampooning Jefferson and the French
Revolution. Entitled "The Providential Detection" the cartoon
depicts the American Eagle saving the Constitution from
Jefferson. Using "masonic symbolism," the Federalist cartoon
attacks the "Altar to Gallic Despotism" and shows at
the base of the altar the building stones for the French Revolution
and Jefferson's outlook. On the left of the altar is the
stone for Venice, followed by Sardinia, Flanders , the Dutch
Republic, and American Separatism-the result of Jefferson's
outlook.
All in all, the exhibition is worth seeing. What's more,
it is high time that the issue of Hamilton's financial reorganization
program be publicly displayed. Only through the work
of Lyndon LaRouche and EIR has such emphasis been placed
on Hamilton's financial and economic applicability to today's
crisis. Despite some of its shortcomings, this exhibition
will provoke people to think about how the U.S. can get out
of the present economic depression. As Alan Fern wrote:
"These debates are by no means remote to our own times.
As this is being written, the contest for the American presidency
is more complex than it has been for more than 75
years and the 'Spirit of Party' is undergoing close scrunity
by the public and candidates alike."
EIR November 20, 1992
A free black family
tells its story I
by Margaret Sexton
I
We Were Always Free: Thel Maddens of
Culpeper County, Virginiai, A 200-Year
Family History I
by Thomas O. Madden. Jr. with Ann L. Miller
W.W. Norton & Co. Inc .. New york. 1992
218 pages. hardbound. $19.95
I
I
Thomas abed Madden, Jr. , has wri/tten a powerful historynot
only of his family, "free" Negr�s from Culpeper County,
Virginia-but a history of slavelry versus true freedom of
mind and spirit. Mr. Madden, no\\j 89 years old, began this
book after he found a trunk full of oIP papers and photographs
representing family history, which[ Mr. Madden augmented
by digging into archives, corroborating dates, places, and
names with county records, and, �ost strongly, with quotations
from Virginia laws regardinB the status of free-not
enslaved-Negroes. (Mr. Madderl's preferred terminology
.
is Negro.)
The result is much more than � genealogy. It is a slice
of life in Virginia from the 1700sito the present day, from
the standpoint of a family of NFgroes who were never
slaves, but who were treated, by law. almost as if they
were. I
The family's story begins wit� Mary Madden, a white
Irish woman, who bore a child in �758 named Sarah, whose
father was black. Because Mary i Madden was white, her
children, although mulattos, wer� free, and could not be
sold as slaves. But because Mary yvas a pauper, she and her
children became indentured servapts; there was no welfare
in the mid- 1700s. Mary had to s�rve her indenture, which
could itself be sold, though neither�he nor her children could
be, until she was 31 years old. Litltle Sarah's indenture was
I
sold first to George Fraser when sIte was only two, and then
to the Madison family of Orangd (the son was our fourth
President, James Madison), whenl she was nine. There, she
learned to be a domestic worker. I
In tum, Sarah's indenture and t1jlose of four of her children
were to be sold in 1783 to a map in Pennsylvania. Sarah
Reviews 57

feared they would be wrongly sold into slavery, and was
only able to prevent the sale of the indenture of her year-old
daughter, Betty. Later, Sarah had several more children,
including Willis Madden (1799- 1879), Thomas o. Madden,
Jr. 's great-grandfather.
Free, but not equal
The story of Willis Madden occupies much of We Were
Always Free. Free blacks were, in Virginia in the 18th and
19th centuries, forbidden to learn how to read , to marry ,
except for common-law marriages; and were forbidden to
marry outside their race, even though many were already
mulattos.
Sarah Madden made a living as a skilled seamstress and
laundress for many leading families in the area of Stevensburg,
Virginia. Although she could not read or write, her
books were kept by an employer. Sarah's condition in life is
described this way:
"Sarah was caught between two worlds. She was more
than a slave, less than a white woman. Her skills and free
status gave her some chance at acceptance in a white world,
but there was a price to pay for this. She depended on whites
for her livelihood, in a time and place where many whites
considered free Negroes immoral , dangerous, and potential
subversives. Sarah's life-style had to be quiet; she had to
avoid the company of slaves and even that of many free
Negroes, so she wouldn't be suspected of involvement in
crimes or slave rebellions.
"There was another consideration for Sarah: If she could
not support her children, they would be taken away from her
and bound out, as she herself had once been."
The Maddens, like other free blacks, were subject to
great restrictions, by law, on their freedom. Just as in South
Africa today , free blacks in Virginia had to carry on their
person "free papers," which included physical descriptions
proving they were not slaves.
Laws enacted in Virginia in 1792 (after the American
Revolution!) were, says Mr. Madden, enacted in part because
of fears by whites that slaves would rebel; enforcement
was lax until the 1831 Nat Turner Rebellion.
After that, new laws were passed that imposed severe
restrictions on free Negroes: They could not be legally
educated; they could not change residence within the state;
they could not own any gun, even for hunting; they could
not legally hold meetings without whites being present,
or conduct any meeting (such as a church service); they
were not allowed trial by jury, except for capital crimes,
and punishment for conviction was more severe than for
whites.
As Mr. Madden writes, besides fear of slave rebellion,
whites feared "Negro success." He quotes from an 1831
petition to the Virginia General Assembly, signed by over
100 Culpeper citizens, demanding "a law for the encouragement
and protection of the white Mechanick, by Prohibiting
58 Reviews
any slave, free negro or mulatto, being placed as an apprentice
in any manner whatsoevdr to learn [a] trade or art,"
referring to skilled trades such as stonemason, miller, carpenter,
shoemaker, etc .
Other petitions even dema�ded free Negroes be driven
from the state.
Willis Madden's success i
It was in the mid- 1 800s that Willis Madden became the
head of household, as a teenager handling his aging mother's
business affairs . The Madden!! rented a farm (with barely
arable land), and eventually bought it. Willis married in a
common-law marriage ("jumpjng the broomstick," as the
author puts it), and had nine �hildren. He learned to be a
cobbler, blacksmith, made brandy and whiskey, and became
a teamster. Eventually, carefully skirting laws designed to
keep free blacks from having bu�inesses, he ran an inn, where
teamsters could stop overnight �nd get food and lodging for
themselves and their horses.
J '
Despite the political clim ,te, which worsened as the
nation drew nearer to the Civ�l War in the 1850s, Willis
Madden was successful, thoug� not well to do. Ironically,
when the Civil War battles,: especially Brandy Station
were fought nearby, the Madden farmstead suffered more
from the Union troops' requisitioning of food, horses, and
livestock, than from the Confederates. According to Mr.
Madden, Willis's fortunes nelVer recovered, emotionally
'
or financially.
Segregation and education
The final portion of the book deals with Mr. Madden's
parents and his own recollections of growing up under segregation.
He writes:
"Unless you have actually lilVed through segregation, unless
you have experienced it firsthand, you can never know
exactly what it was like . . . . Segregation was someone's
assuming that you are different! and not quite as good as he
was; only it wasn't just someOl�e's opinion, it was the law.
. . . Having lived through segregation, I know exactly how
Jesus felt when Peter denied him."
The one lesson to be learned above all else, from the
Madden family's history: Black people had to be educated.
Mr. Madden writes that his patents were both teachers but
that in order to teach, their own children had to stay home
and do the farm work, rather than attend school. Mr. Madden
writes that he sent his children to Catholic schools in the
North , rather than have them educated in segregated schools,
and adds that "I'm not sure that integration itself meant that
much to me. The important thing to me . . . was that segregation
had ended."
Reading the history of his fllmily, we can all appreciate
the strength of character that was needed to endure living
under both slavery and segre�tion, and yet remain truly
free.
i
:EIR November 20, 1992

Music Views and Reviews by Kathy Wolfe
Recording catches
up with bel canto
Nimbus Records Prima Voce:
"Jussi Bjorling: The First Ten
Years" (N! 7835)
"Enrico Caruso: Arias, Ensembles,
Songs" (N! 1790), 3 CDs
"Conchita Supervia in Opera &
Song" (N! 7836/7) 2 CDs
Nimbus Records has just issued the
first CDs of great singers using its new
"Big Bertha" gramophone hom,
which pulls so much sound off old 78s,
that it seems the singer is in the room.
While the best bel canto singers died
before the recording era, it is nevertheless
a service to history that so much
of the first-generation recorded voices
can now be heard. The first such releases
are the legendary tenors Jussi
B j6rling (1911-60) and Enrico Caruso
(1873-1921), and mezzo-soprano
Conchita Supervia (1895-1936).
The hallmarks of the Italian school
of bel canto are roundness of sound,
"elevation," and a rapid, refined vibrato.
All these are compressed into
too narrow a range for the real voice
heard on recordings electronically
transferred from 78s before 1940 .
Lovers of vocal music know from the
LPs of these artists, for example, that
all three had plenty of vibrato-but
so much of it often sounds annoying,
because the high range of frequencies
"sticks out."
"Elevation"-one of several
terms for the bel canto method of amplification
of tone purely in the head,
not in the throat-can also seem tinny
or nasal on electronic transfers .
The relation between the acoustical
transfer process used in these recordings
to electronic transfer is a bit
like comparing an acoustical guitar to
an electric one. Nimbus plays old 78s
on a 1923 Victrola in the warm acous-
EIR November 20, 1992
tics of a ballroom in an 18th-century
Welsh castle. They use a teak thorn
needle, the old needle of organic material
which "gives" with the old shellac
78s, where metallic needles just
scratch.
Classical technology
Nimbus first used Victrola's original
papier-mache hom, which was curled
up ram's-horn style to fit into living
rooms. Then they created a straightened
hom, expanded, which pulled
even more sound offthe 78s. The third
generation Mark III hom just on line,
"Big Bertha," has been widened in
fiberglass to 10 feet across, and the
results are big, too.
Electronic transfers are much
cheaper (thorn needles used in acoustic
transfers , for instance, are very
costly and wear out with one or two
playings) and far less time-consuming.
But they lose a lot of the voice,
and also pick up surface noise off the
78s. The electronic transfers must
then use Dolby noise reduction, which
compresses the signal , taking the
highest and lowest frequencies out,
deleting whole swaths of singing
voice with it. After all, Dolby is a rock
technology, used to compress a sound
signal for radio transmission , because
it helps pop music sales to broadcast
music uniformly. It has no place in
classical music.
The first CD on the new hom,
"Jussi Bj6rling: The First Ten Years,"
was a pleasant shock. His "Ah si, ben
mio" from Verdi's "n Trovatore" is a
veritable definition of "round sound":
every vowel made with a very large ,
round space inside the mouth-a hint
of " 0 " and "u" in each vowel-imparting
what is described as a golden
color. The depth of tone allows a full
legato which makes even Puccini (a
I
composer who s�rapped bel canto for
raw sensuality at the end of the 19th
century) sound like music.
I
Rounder and rounder
Remarkably, Big Bertha makes Enrico
Caruso's I Q08 recordings sound
almost as full as Bj6rling's 1938 ones.
Caruso was a baritone before becoming
a tenor, but, as with Bj6rling, none
of the earlier electronic reproductions
prepares one fo� the depth of his instrument.
As th� liner notes report, he
continued to fill ;n for the baritones.
Caruso had i artistic problems, a
coarseness which. stemmed from collaborating
too �ch with Puccini and
others of the verismo school. Nonetheless,
this CD iset-one each of arias,
ensembles, ajnd songs both in italian
and other l&nguages-shows his
best. They are available singly as NI
7803, NI 7809, and NI 7834.
Noteworthy �e the tempi and the
poetic uses of rt4Jato ("stealing" from
one beat and adding to another) and
portamento (antjicipation of the next
note over a wid� interval), which are
much more dra"m out than anything
allowed in tod*y's "just the notes,
please" world. 1n the "Sextet" from
Donizetti's "LU!ia di Lamermoor" on
the ensemble di c, the group's ability
to "stretch" out line is breathtaking.
Spanish mdzo-soprano Conchita
Supervia cham�oned bel canto composers
in the I �20s, returning many
forgotten Rossilji works to the stage.
Her elevated to�e, nearly unique for
a low voice, is �bvious on electronic
transfers , wherl'she often sounds like
a high soprano, 0 highly placed in her
head are the fa , t passages. It might
prompt some to say she is too nasal.
Not here , whdre the whole voice
comes through, !with a richness, especially
in the low tegister, which is never
heard today .
I
Reviews 59

�TIillNational
Clinton must take on
the 'Casino Mondiale'
by Kathleen Klenetsky
If President-elect Bill Clinton doesn't move immediately to
crack down on the worldwide "casino" created by the last 10
years' orgy of international financial speculation and deregulation,
he won't have a snowball's chance in hell of delivering
on his promises to revive the U.S. economy and to provide
millions of new high-wage, high-technology jobs. Instead,
he will be faced with the worst financial and economic collapse
in modem times, one that will make Herbert Hoover's
political fate following the 1929-3 1 collapse seem a bed of
roses.
That friendly warning was issued on Nov. 10 by international
economist and former presidential candidate Lyndon
LaRouche, who called upon Clinton to prick the speculative
bubble that dominates the world economy, before it forces a
wholesale restructuring of the U.S. economy on the model
of the savage austerity implemented in 1930s Germany.
Prick the bubble
"Contrary to the popular mythology which grips public
opinion among the so-called reader of newspapers and viewer
of television news and talk shows," said LaRouche, "The
problem is not . . . the deficit nor even the size of the federal
official debt.
"The problem of the U.S. economy is a policy of deregulation
unleashed during 1978-79 . . . by the Carter administration
and by Paul Vo1cker's leadership of the Federal Reserve
System, which created . . . the biggest international
financial bubble in world history. That bubble is what is
crushing the U.S. economy and the U.S. people," said
LaRouche, "not the debt, and not the federal deficit."
Under these policies, the international economy has been
turned into a "Casino Mondiale," a world casino, in which a
trillion dollars is gambled daily in the world financial
markets.
The devastating damage which this has caused to the real
60 National
economy was detailed by EIR I in a feature published in the
Oct. 23 issue. The study showed how the U. S. economy has
been deliberately and systematically looted, especially since
the early 1980s, through such features of this global crapshoot
as the so-called derivatives markets, through which
flow billions of dollars in drug :money, as well as trillions in
other speCUlative transactions, tompletelY unregulated.
In his statement, LaRouct)e also urged Clinton not to
take the advice of such people as Ross Perot, Sen. Warren
Rudman (R-N .H.), and former : Democratic presidential candidate
Paul Tsongas, who insi� that draconian cuts in social
spending, especially in Social Security and Medicare, must
be enforced to "save" the economy.
As LaRouche put it: "Unless the Clinton administration
changes its policy and recognizes that Ross Perot did not
understand economics, did not! recognize that the Fed is the
one thing they must attack-it� policies, and free trade, and
GATT [the General Agreement10n Tariffs and Trade] and this
other nonsense-and instead fdIlows my particular program,
this country is going to spiral deeper and deeper into the worst
depression of the 20th century,; or perhaps into something as
bad as hit Central Europe in the 14th century."
Pressure on Clinton
The issue which LaRouche raised is the crucial one for
Clinton to address. Wall Street'and its minions have already
started bombarding Clinton with the message that if he goes
beyond the extremely limited ''Jgrowth program" he has outlined-a
piddling $20 billion IJ4r year infrastructure program
combined with another $25 billion allocated among an investment
tax credit and some, new worker retraining and
educational projects-he'll be cut off at the knees.
So far, the bluntest puhliq nessage from this gang was
delivered by the WaLL Street Journal on Nov. 6, in a lead
article headlined "The Vigilantes: World's Bond Buyers
EIR November 20, 1992

Gain Huge Influence Over U.S. Fiscal Plans."
"Big bond investors around the world may now hold
unprecedented power-perhaps even a veto--over U. S. economic
policy," the article began. "Bill Clinton got a taste of
that power in the past four weeks. Bondholders, increasingly
anticipating the Arkansas Democrat's victory in the presidential
race, pushed down prices of U.S. Treasury bonds and
thus pushed up long-term interest rates to about 7.7% from
7.3%. It was the bond market's way of warning Mr. Clinton
that as the new President he will long be on probation, with
his every move instantaneously scrutinized."
(Although not mentioned in the Journal article, the rise
in the bond prices coincided with rumors that Clinton was
considering a proposal for doubling the size of his proposed
public works program.)
The article asserted that Clinton will be allowed to implement
some form of stimulus package. But if it means increasing
the deficit significantly, or causes a rise in the inflation
rate, "the reaction could be stiff and painful. With computerized
trading linking global trading in U.S. government
bonds, which now averages $150 billion a day, a worried
investor can unload millions of dollars of bonds in secondsand
virtually 24 hours a day. If thousands of investors worldwide
dump U.S. Treasury bonds, they could drive up longterm
rates, which move inversely to bond prices, hobble
America's economic growth and even plunge the nation back
into recession."
The Journal quoted Robert Hormats, vice chairman of
the Wall Street investment bank Goldman, Sachs: "The global
bond market can be a very tough disciplinarian. Bond
buyers have a very conservative bias, they'll be looking very
hard at whatever Clinton does."
Coming from Hormats, that message is indeed significant.
Hormats not only served as an adviser to Clinton on
economic policy, his name has also been mentioned for a top
economic policy position in the new cabinet. Moreover, his
firm, Goldman, Sachs--one of the key players in the derivatives
markets-was the largest single contributor to the Clinton
campaign.
TheJ ournal is just one among many organs of the international
financial elite which has been telling Clinton that he
must move immediately to assure the "markets" that he won't
embark on a growth plan beyond that which he outlined
during the campaign.
Paul Tsongas, a founder of the rabidly pro-austerity Concord
Coalition, along with Warren Rudman, Council on Foreign
Relations Chairman Peter Peterson, and Washington
attorney Lloyd Cutler, went on national television on Nov.
9 to tell Clinton that his constituency is no longer the U. S.
electorate, but the international financial markets.
Similarly vicious advice has come from a host of media
scribblers who speak on behalf of the Wall Street establishment.
Morton Kondracke of the New Republic-which supported
Mussolini' s fascist policies-wrote in the Nov. 7
EIR November 20, 1992
Washington Times that "to calm the;financial markets, [Clinton]
ought to limit his plans for ibfrastructure spending."
Kondracke urged Clinton to appoirit "market-oriented moderates
to key economic positions and include some Republicans
in the groups," naming Rudman, Peterson, and
Tsongas.
Former JFK adviser Ted Sorensen, writing in the Nov. 7
New York Times, urged Clinton to give a State of the Union
speech early in his administration, to prescribe "the unappe­
tizing medicine that must be taken for several years by each
segment of our society."
Key appointments
How is Clinton reacting? To th� extent he's talked about
economics since his election, he's reaffirmed his commitment
to his initial program, but hasi also gone out of his way
to pledge his allegiance to deficit reduction, and to reassuring
the markets that he can be trusted.
One important indicator of the incoming administration's
economic direction will be whom Clinton appoints to fill key
economic positions, such as treasury secretary. Those who
are reportedly on Clinton's short list for the posts do not
augur well, however. In addition to Hormats, they include:
• Paul Volcker, chairman of the Federal Reserve under
Jimmy Carter and, subsequently, Ronald Reagan. Volcker,
who publicly endorsed the idea, firSt circulated by the Council
on Foreign Relations' 1980s Project, for the "controlled
disintegration of the world economy," is perhaps best known
as the man who put the U.S. economy through the floor via
his 20%-plus interest rate policy wh.ile at the Fed. Volcker is
by far Wall Street's favorite candidate, although some in
the Clinton camp fear he might verwhelm the fledgling
administration.
• Robert Rubin, a lifelong DeqlOcrat and close friend of
Robert Strauss, who co-chairs Goldman, Sachs. He recently
stated that "you have to combine fiscal stimulus with longterm
deficit reduction, and the art of it is to make the deficitreduction
part credible." He has also asserted that Clinton
would deal with the deficit more aggressively than the Bush
administration, because the markets wouldn't give a Democrat
the same leverage they would give a Republican.
• Roger Altman, who met Clinton when a student at
Georgetown University. He servedi as Jimmy Carter's assistant
treasury secretary for domestic finance. He currently is
a partner in the Blackstone Group, 3/Il investment firm headed
by Peter Peterson, which specializes in buying up failed savings
and loan institutions.
• Felix Rohatyn, of Lazard Freres, who created "Big
MAC," the bankers' dictatorship :which has virtually run
New York City since the mid- 1970s, placating the city's
creditors by slashing social service$ and stretching out infrastructure
maintenance and investment to the point that the
conditions of roads, bridges, and tme water system have become
nearly life-threatening.
National 61

International Responses
Clinton means trade
war and mediocrity
Malaysian Prime Minister Mahathir Mohamed, quoted in
the New Straits Times, Nov. 4:
Prime Minister Mahathir suggests that Clinton attend to
human rights and environmental issues in his own country,
before exporting his ideas elsewhere. "You cannot preach
something you do not practice. We hope there is no attempt to
export their ideas and standard to other people," said Mahathir.
In its lead editorial, the newspaper stresses that Clinton
has no mandate from the voters. "The prosaic truth is that
they came to vote in rejection of the Bush government. The
electorate responded, not to Clinton for his ideas, but simply
to the idea of change."
Japanese Foreign Minister Michio Watanabe, addressing
constituents in Tochigi on Nov. 4:
Watanabe warned that the Clinton victory may mean the
reactivation of the U.S. "Super 301" trade war legislation,
which imposes tariffs of up to 100% on exports of any country
that refuses to open its markets sufficiently to U.S. goods.
"The Democratic Party has been supporting trade protectionism
and attempting to put a brake on the sale of cheaper
Japanese goods . It's possible [Clinton as President] would
reactivate Bill 301 ," he said.
Taiwanese Economics Minister Vincent Siew, quoted in
the Economic Daily News, Nov. 4:
"The U.S. will no longer be a completely open market.
Priority will be given to U.S. interests. This will affect the
global economy."
Economic Times, India, editorial, Nov. 5:
The fact that the U.S. is bankrupt means that the U.S.
will exercise its muscle in various commercial and political
fields. This is not the arrogance of a superpower, "but the
cattiness of a declining power wanting to blame everybody
else for its decline . . . .
"President Clinton is likely to bring back Super 301 in a
far stronger fashion than before, and perhaps Special 301
also. He is more likely to cut back than expand U.S. aid and
U.S. funding of global agencies. He is likely to add more
conditions for the disbursal of funds, including provisions
on human rights and defense, that India is likely to find
irksome."
62 National
El Pais, Spain, "Europe Fears Trade War with U.S.," Nov. 3:
"If Clinton gets to the White House, many experts say,
customs wars will break out fori certain. The French will be
the first with their heads on the dhopping block, they will see
Washington strike French wines heavily. "
Panama, report from EIR' s SOUi'ces, Nov. 4:
As soon as Panamanians heard that George Bush had
gone down in the polls, they lit up the skies with fi�works
and took to the streets with horn-tooting motorcades. Since
Nov. 3 was the anniversary of Panama's separation from
Colombia, a reporter asked several people whether the fireworks
display was not in fact to celebrate the founding of
the republic. "No, it was to celebrate the fall of Bush, the
genocidalist," replied one persop. Another said, "People are
just happy because Bush the criminal is gone. There is optimism
now. The man who putl Guillermo Endara into the
presidency and kept him there, is done for. There is hope."
Le Figaro, France, Nov. 5:
Clinton's victory was "fragile and ambiguous." His triumph
has the sense of being a '�ictory by default. Over the
course of months, the pressing desire to rid themselves of
George Bush slowly supplante4 the profound doubts that a
majority of Americans still havelabout the strength of character
of Bill Clinton."
Antonio Gambino, senior foreign policy analyst for Expresso
magazine, in an interview with Lr Unita, Italy, Nov. 6:
"Clinton resembles Carter more than Kennedy. . . . The
same voters who had believed in Reagan, in easy money . . .
rely on Clinton's smile . . . . But Carter, when he had to face
the economic crisis, was crushed . . . . The Americans want
to stay in Europe , want to use NATO as a means, an instrument
to control us. Therefore , 1 do not believe that Clinton
will change the old policy."
Neue Zurcher Zeitung, Switzerland, Nov. 4:
A Clinton administration would be much more inclined
to engage U.S. military forces .n regional hotspot conflicts
than even the Bush and Reagani administrations were. Clinton's
advisory team, typified by his defense advisers Sen.
Sam Nunn (D-Ga.) and Rep. Les Aspin (D-Wisc.), belong
to what is known as the "limited objectives school," which
foresees a reshaping of the U .SL military, in the "post-Cold
War world," to deal with "new threats and regional conflicts.
" They foresee smaller, mCilre flexible forces, of a "conventional
reaction" type, using "smart weapons," to be deployed
under a "multilateral United Nations" mantle. In their
doctrine, targeted military power is vital as an arm of foreign
policy, to maintain the "credibility" of that policy. They also
insist that the risks and dangers of U.S. involvement are
decreased, because it is less likely that regional conflicts
would escalate, now that the Soviet Union has disintegrated.
EIR November 20, 1992

ADL and Congress: the best
government drug money can buy
The fo llowing profile of the Anti-Defa mation League of B' nai
B'rith , the American-Israeli Public Affairs Committee, and
other leading Zionist lobby agencies is excerpted from a
fo rthcoming book by an EIR investigative team. That book,
which is scheduledfor publication before the end of the year,
catalogues the pernicious central role of the ADL andAlPAC
in the international organized crime apparatus, especially in
the drug trade . The role of these drug-lobby fronts in the
corruption of our federal government is a critical feature of
America 's ongoing political crisis and, for that reason, this
material is released in advance of the book's publication .
In 1974, Richard Nixon resigned as President as the result of
the botched Watergate break-in at the Democratic National
Committee's headquarters in Washington, D.C. during the
1972 presidential campaign. As reporters , congressional
committees, and special prosecutors pored over the details
of the Watergate scandal, evidence of a pattern of bribery
and coverups emerged that contributed to Nixon's resignation
more than the break-in itself.
Since the fall of Nixon, the American political lexicon has
been blessed with such Watergate offspring as "Debategate,"
"Cartergate," "Irangate," "Bushgate ," and "Iraqgate." Political
corruption scandals have become commonplace.
Yet despite this growing addiction to political sleaze, the
vast majority of Americans are totally oblivious to the fact
that the Anti-Defamation League of B 'nai B'rith (ADL) and
its fellow hooligans in what is euphemistically dubbed the
"Zionist lobby" ("drug lobby" is a far more appropriate description)
commit crimes against the American electorate
that make Watergate seem tame by comparison. Blackmail,
extortion, and bribery are such routine tactics of the Zionist
lobby that its primary target-victims, the U.S. Senate and
House of Representatives, have been turned into political
mush, incapable of governing under the best of circumstances,
and completely paralyzed in the face of the current
political and economic crises.
While the media have led the charge against congressional
incumbents, appealing to a justified and growing "throw
the bums out" sentiment among the majority of voters , the
sad reality is that unless the power of the Zionist lobby is cut
down to size, any newly elected Congress will be like lambs
walking to the slaughter, and nothing will change.
EIR November 20, 1992
An illegal system of contributions
Officially, both the ADL and it& leading collaborator in
this corrupting of the Congress, the American-Israeli Public
Affairs Committee, are forbidden from engaging in political
campaigning due to their tax-exempt status. Both groups
have managed to systematically break the electoral and tax
laws with impunity-largely due to the fact that they have
placed fellow travelers in key posts lin the Executive branch
regulatory agencies that are supposed to monitor the activities
of groups benefiting from the tax ¢xemptions: the Federal
Election Commission (FEC) and the Internal Revenue Service
(IRS).
A glimpse at how the Zionist lobby has used the power
of the narco-dollar to corrupt and r;:ontrol the Congress is
contained in a lawsuit filed in fedenU court in Washington,
D.C. on Aug. 1 0, 1992. The suit, filed by a group of retired
U.S. diplomats against the FEC, ¢harges that the agency
failed to impose sanctions against AjlPAC for functioning as
an unregistered political action committee. Even though the
general counsel at the FEC agreed that AIPAC had violated
the law, FEC commissioners decided in July 1992 not to take
any action against the group.
According to the court papers, AIPAC secretly controls
at least 27 different political action committees (PACs) (other
investigators place the figure at 59), and uses them to funnel
enormous amounts of money to candidates for Congress who
support AlP AC' s political agenda. Under FEC statutes, strict
limits are imposed on how much mpney can be given to an
individual candidate by a single PAC. The purpose of the
regulation is to curb the power of special interest groups in
the financing of candidates. But by omning dozens of PACs,
AIPAC, according to the suit, illegally circumvents the law.
The case of the Joint Action Co�mittee for Political Affairs
(Jacpac), one of the 27 PACs Qamed in the suit, underscores
the close relationship betweep AIPAC, the ADL, and
the PACs. Jacpac lists among its directors the wives ofThomas
Dine and Stuart Eizenstat. Since 1980, Dine has been the
executive director of AIPAC. Eizelllstat, a former domestic
policy adviser to President Jimmy Carter, is the head of the
National Jewish Democratic Counci� (NJDC) , an ADL-dominated
· organization dedicated to winning control over the
Democratic Party and placing as ma�y of its members as possible
on the staffs of congressmen, �overnors, and mayors.
National 63

Spreading narco-dollars
Where does all of the money come from to buy up the
hundreds of congressional seats currently owned by ADL­
AIPAC? A brief look at the Roundtable PAC, another one
of the 27 outfits cited in the lawsuit as AIPAC-owned, begins
to answer that question. Roundtable PAC was founded in
1981 by a group of ADL and AIPAC officials and contributors
, led by Malcolm Hohlein, the head of the Jewish Community
Relations Council of New York. From its inception,
it was housed in the Manhattan offices of a firm called Integrated
Resources. Integrated was a thinly veiled money conduit
for Michael Milken and his crew of junk bond peddlers
at Drexel Burnham. In fact, Drexel CEO Stephen Weinroth,
the liaison between Milken and Ivan Boesky in their insidertrading
scams, was a director of Integrated. All of Milken's
prime "investors" socked their money into Integrated as a
tax dodge. All of them also poured contributions into the
Roundtable PAC.
Among the biggest donors to Roundtable were Ivan
Boesky, Robert Davidow (Milken' s personal aide at the Beverly
Hills office of Drexel), and the sons and daughters of
Meshulam Riklis, Laurence Tisch, Saul Steinberg, and Paul
Milstein (of Carl Lindner's United Brands).
When the Roundtable PAC holds its meetings, guests of
honor include New York Attorney General Robert Abrams,
Minnesota Attorney General Hubert "Skip" Humphrey, and
Sen. Daniel Patrick Moynihan (D-N.Y.). All are regular
recipients of AIPAC-controlled PAC dollars. In return for
such generosity, Moynihan in 1986 shepherded a revision of
the tax code through the U. S. Congress that gave Integrated
Resources an added $43 million in tax breaks. With friends
like Moynihan in the U. S. Senate, Integrated could afford to
be generous-at least for a while.
The relationship between Milken and Integrated was so
tight that within three months of Milken's indictment in
March 1989 for insider trading, Integrated defaulted on $1
billion in short-term loans. It seems that without the running
pipeline of hot money from Milken' s bottomless Caribbean
cash pool, Integrated was lost. The AIPAC-ADL-run political
action committees, in short, represent the combined financial
clout of the Lansky dope syndicate . Any similarity
between ADL-AIPAC and the national interests of the state
of Israel or the Jewish people is purely coincidental.
Contributions are staggering
All told, 211 candidates for the U.S. House and Senate
from 48 states received money from the ADL-AIPAC PACs
between Jan. 1, 1991 and March 31, 1992. Of the 211 recipients,
187 were incumbents. The total amount contributed in
that IS-month period was well over $2 million , making the
ADL-AIPAC combination the second largest source of institutional
money to candidates for federal office, second only
to the combined donations of all of the labor union PACs. By
October 1992, that figure had soared past the $3 million mark .
The ADL-AIPAC PACs don't funnel the majority oftheir
64 National
money to Jewish candidates, or even into candidates running
for office in states where there are large Jewish populations.
More typical of the kinds of officeholders and candidates who
receive AIPAC funding is Richard C. Shelby (D-Ala.). First
elected to the Senate in 1986, SQelby has recently gained notoriety
for attempting to impose the use of the death penalty on
the District of Columbia. Shel�y received $67,800 from the
AIPAC PACs in the 15 months beginning in January 1991,
and has a career total of $133,825 in contributicms.
Another recipient of AIPA(:: largesse is Sen. Tom Harkin
(D-Iowa) , who ran an unsuccessful bid for the Democratic
presidential nomination in 1992. Harkin came into the Senate
in 1984 by defeating incumbent Roger Jepsen, who in 1981
had cast a decisive vote against AIPAC in a fight over the
sale of AWACS surveillance a�rcraft to Saudi Arabia. In his
first Senate bid, Harkin receiyed over $100,000 from the
AlP AC combine. His career total in AIPAC money is a staggering
$366,130.
A total of 29 current incumbent senators and congressmen
have received over $100,000 in contributions from the
ADL-AIPAC PACs. A dozen have received $50,000 or more
just for their 1992 reelection campaigns.
That "dirty dozen" is made up of Richard Shelby (D-Ala.) ,
Mel Levine (D-Calif.), Timothy Wirth (D-Colo.), Daniel Inouye
(D-Hawaii), Barbara Mikulski (D-Md.), Christopher
Bond (R-Mo. ), Kent Conrad (P-N .D.), Robert Packwood (R­
Oreg.), Arlen Specter (R-Pa.), Harris Wofford (D-Pa.),
Thomas Daschle (D-S.D.), and Robert Kasten (R-Wisc.).
Narco-dollars are the key ta the ADL's hold over the U.S.
Congress, but the ADL and A1PAC have other trump cards
as well . Both groups operate secret, highly illegal units that
gather blackmail material and! carry out dirty tricks against
political opponents.
,
When Richard Nixon gotc�ght running such a "plumbers
unit" at the offices of the Committee to Re-elect the President
(CREEP) in 1972, the Americ*n people demanded his scalp.
It remains to be seen what the reaction will be now that AIPAC
has suffered its first damaging 4efection from its own "plumbers
unit."
Gregory Slabodkin, who worked for a number of years in
AIPAC's Policy Analysis unit, eventually got turned off by
some of the dirty deeds he was qrdered to carry out by the unit's
chief, Michael Lewis, and he ql1it his job and went public with
his story . Michael Lewis is the: son of Dr. Bernard Lewis, the
Oxford-trained Arabist who vtas the architect of the Carter
administration's" Arc of Crisisf' policy which abetted Ayatollah
Khomeini's Islamic Revolption in Iran and the spread of
fundamentalism throughout t� region.
"Policy analysis," the euph�mistic label given to AlPAC's
"plumbers," maintains dossiers on thousands of American activists-many
of them Jewish. Un�versity professors who criticize
AIPAC or ADL's activities are placed on a blacklist. Their lectures
are monitored by spies, who occasionally stage disruptions.
Their homes and cars are vandalized. University alumni
linked to ADL and AlPAC tluieaten to pull financial backing
EIR November 20, 1992

illegalities finally catching
up with AIPAC
The Zionist lobby's arrogant bullying tactics, especially as
they relate to the Washington political scene, are finally
beginning to blow up in its face. On Nov. 3, David Steiner,
the president of the American-Israeli Public Affairs Committee
was forced to suddenly resign when a taped conversation,
in which he brags about his group's control over the incoming
Clinton administration, was made available to the Wash>
ington Times. Excerpts of the tape, a conversation between
Steiner and New York Jewish activist Harry Katz, were
published the next day by the newspaper and were later
carried by all major news outlets.
Katz, a longtime Jewish activist and small-scale financial
backer of AIPAC, covertly taped a conversation
in which the AIPAC president boasted that:
• AIPAC had dozens of people in key posts inside
the Clinton campaign;
• he was personally negotiating Clinton's choices for
secretary of state and national security adviser;
• AIPAC had worked out a secret deal with Bush
administration Secretary of State James Baker III which
led to Israel receiving nearly $1 billion in additional underthe-table
U.S. aid;
• AIPAC aided the reelection campaign of Sen. Daniel
Inouye (D-Hi.) by conducting a $27,000 voter poll and
providing other aid.
All of these actions by AIPAC, which has tax-exempt
status, are totally illegal . Naturally, once the tape was
from the schools unless the targeted faculty members are immediately
fired or blocked from tenure.
Members of Congress are cast as either friends or targets
of the ADL-AIPAC syndicate. If they are on the friendlies
list, they may be the recipients of weekly computerized
blackmail dossiers on some of their colleagues and other
policy-shapers, which are called "activities." The "activities"
dossiers are sent out in plain white envelopes bearing
no organizational emblems. Deniability is a priority, and the
whole filthy blackmail and extortion program was deniable-until
Slabodkin's defection.
AIPAC's Policy Analysis unit maintains a singularly
close link to the ADL's parallel Fact Finding department,
which engages in the same kind of activity. In fact, shortly
after Thomas Dine took over as executive director of AI­
PAC, he hired Amy Goott as the first full-time staffer of the
Policy Analysis unit. Goott had worked for years at the
ADL; her shift of address was apparently blessed by her
EIR November 20, 1992
made available to the press, Steiner resigned, issuing a
statement in which he denied that his bragging was a true
reflection of AIPAC's activities. "In an effort to encourage
and impress what I thought was. a potential political
activist calling on the telephone, I made statements which
went beyond overzealousness and e�aggeration and were
simply and totally untrue."
Steiner's indiscretions are not the; only problem besetting
AIPAC. Israeli Prime Minister iYitzhak Rabin is reportedly
furious at AIPAC's hdvy-handed warfare
against the Bush administration and its cozy ties to the
now-defeated Likud Party. Rabin is in the middle of a
war with Likud operators inside th¢ Israeli intelligence
establishment who are apparently ruoPing an underground
war to retain power over the all-im�rtant foreign intelligence
service. AIPAC has,been an important collaborator
of those Likud-Mossad circles. As part of Rabin's reported
cleanout efforts, AIPAC Executilve Director Thomas ..
Dine has reportedly been kicked upSitairs and another senior
AIPAC official , Steve Rosen, is said to be about to
be given the axe.
Early this year, the Federal Election Commission refused
to act on a complaint filed by a group of former
government and elected officials who charged that AIPAC
was secretly running dozens of pro-Israel political action
committees in violation of its tax-exejmpt status. The FEC
and Internal Revenue Service are no�orious for their protection
of groups like AIPAC and th¢ ADL.
But now , with Steiner's remarks,out in pUblic, with a
lawsuit pending in federal court on its!coverup of AIPAC's
activities, and with Steiner now at lealSt potentially a target
of federal prosecution for fraudulent solicitations of contributions,
the FEC may find itself umder the gun.
bosses at the ADL, and she continued for a period of time
to work for both agencies, thereby assuring near-total integration
at the covert operations level .
One feature of the job that ultimately got under Slabodkin's
skin was the fact that many ofhi$ targets were prominent
Jewish activists, usually affiliated with left-wing causes in
both the United States and Israel. Many were outspoken critics
of the Israeli Likud government's bf11tality toward the Palestinians
living in the Occupied Terri.ories. Many simply favored
a peaceful and equitable solution to the Arab-Israeli
conflict. And many of these Jewish activists were treated to
the same violence and vicious smearilllg by ADL-AIPAC that
was meted out to Palestine Liberatjpn Organization (PLO)
officials.
This "McCarthyite" targeting of prominent Jews who
bucked the ADL or AIPAC on some policy issue or financial
deal underscores the fact that the ' ADL and AIPAC are
anything but a Jewish "defense organization."
National 65

Mter the Election
LaRouche, Bevel vow to continue
campaign, fight for economie sanity
What follows is excerpted from impromptu election night
remarks by the Rev. James L. Bevel, Lyndon LaRouche's vice
presidential running mate, to campaign workers in northern
Virginia. In an unusual move, LaRouche announced that the
LaRouche-Bevel independent campaign plans to continue
after the Nov. 3 presidential election. He said that the platform
book, The LaRouche-Bevel Program to Save the Nation,
will be reprinted to circulate a sane alternative to austerity
during the six months from the election through the first
90 days of the Clinton administration, a minority government
with no popular mandate.
The campaign's successfulfight to defeat a death penalty
referendum imposed by Congress in Washington, D.C., and
the momentum of its drive to topple a statue there of KKK
co-founder Albert Pike, typify the leading role candidates
LaRouche and Bevel will continue to play in national life,
LaRouche said later in private remarks. He pointed out that
the District of Columbia is not just "some part of the United
States," in the minds of most Americans, but the nation's
capital; hence "conceptually, psychologically" it represents
the nation as a whole.
. . . First of all, let me thank all of you guys. What is important
to me , in terms of what our impact has been, is that we're
bringing principle; we're raising the question in people's
minds about the fact that government is principle and that
when you're in government, in public office, and you are
running, it's a question of principle, it's not a question of
winning. I think that that level of morality is being brought
back. I think we have built a solid identity.
It doesn't make any difference if you win, if you have
badly served people as to principle. That means when people
are getting ready to do something on principle, you are that
point of reference. To me, that's important, that all of our
fights are about principle.
On the Washington situation, I think that what was important
is that when we started, if you recall, there was really
no movement in Washington over the death penalty . . . the
mayor was waffling on that question, and we came in on the
question of principle. We didn't come in fighting the death
penalty. For a political reason, we'd be against murder period,
which set a broader parameter for everybody to join in
that struggle . . . to mobilize the whole town.
66 National
Now what we've got to do now is to convince the people,
show the people, not convince them, but show them how, in
fact, it is as easy to be able to do this, it is as easy to stop the
murder in the streets as it was to vote down the death penalty.
Let me say to some of you, thlit some of you may not even
believe that. But it is.
Why is it easy to do that? First of all . . . most people do
not understand the crisis of Al1i1erica. Most of us have never
thought about it. What gave mt an insight into this crisis, or
the crisis in the South when I was working: My brother
Clarence, who was four years older than me, beat me up,
and broke my nose. Since he didn't apologize, and I didn't
forgive him, we walked around mad with each other for
years, and then finally Clarence got killed. The mafia in
Cleveland killed him. I walked up to his casket, and what
was interesting is the profound: fact of how frail and helpless
people are . I had never thought about it before . Since that
point, I've really never been seriously angry with anybody,
because I'm reminded of how frail and helpless people are.
Now, when you look at America, this great nation, with
all its chaos, confusion, busting at the seams, the economy
is in shambles, drug addictions, schools not educating; and
all these people are really frail:and helpless. And in order to
understand that situation, most of us see the problem in terms
of some evil people. But don't see it as that! See it as a ship
in a storm and nobody on the ship has the ability to call order.
So that ship is out in the storm, and the ship can well wreck.
That's the condition that America is in tonight.
When you understand that,' you understand how frail and
helpless Bush, and Clinton, and the congressmen, and the
mayor, they all are ! They are frail and helpless; which puts
a great responsibility on us to really be compassionate and
enthusiastic and to come up with the insight for addressing
the problems of this nation. You've got to think about that,
that there is nobody out there at this point, there's no community,
that is giving decisive, clear leadership, and you've
got to understand how frail those people are. When you
understand that, then you approach people differently . You
will not approach them as an enemy, you will approach them
as a student and as a patient.
What all of us have to do is understand what our nation
is. Most of us have never understood what America is. In
order to understand America, you have to really go back and
EIR November 20, 1992

understand the prophet Isaiah, who says, "And the government
shall be upon his shoulders." Well, that has actually
happened; most folks don't know it. In other words, the crisis
is that there is a Christ. The next crisis is that there is a
government upon his shoulders. And it's our government. If
you're called into a situation and you are in a government
system and it's upon the shoulders of Christ , and he is correct
and the government system itself is correct and you and all
the other citizens are incorrect, how could you get control of
your government?!
In other words, the crisis in America is that our government
says this in effect: "You must at all times operate with
the consciousness of not violating the rights of any of these
fellow citizens. You must operate at all times by not compromising
your integrity." Now that's difficult. So what is the
crisis in America? All of us do not take seriously the old question
of impeccable integrity in operating in a way that we don't
violate folks' rights, we don't aid and abet in the violating of
folks' rights and we don't consent to the violating of folks'
rights. The crisis cannot be addressed until there is a community
of people who are like that. It's interesting , because if you
can't throw the government over, because it's along Christ
Jesus's shoulders. You can't overthrow America. You can't
overthrow this government. It's like a wild horse and it's
bucking people. But you can't do anything but what I just
suggested. You can't run it out. You can't throw it over. The
only thing you can do is come to order. .
The priority of education
Every problem we have can be traced back to people
violating the rights of other people. Just let me give you an
illustration on the education question.
EIR November 20, 1992
The Rev . James Bevel announcing his
decision to runjor vice president on the
LaRouche independent ticket on Aug. 4.
LaRouche and Bevel have decided to
continue their campaign beyond Nov . 3.
Would we have poverty, if the education of whites, of all
the children , were protected? No . . . . And then you must
ask the question, "Where am I off in my integrity, and why
am I negligent to the violating of children's rights to be
educated, that causes me not to make that one of my priorities?"
And then no matter what we did in America, based on
the fact that the government is run by the people, it's a
government of, for, and by the people; . . . how could the
country run properly if the rights o� the children aren't protected,
in terms of education? . . .
Why am I saying all this? Because we must be the community
that develops impeccable integrity. And we must
learn to operate to such a refined level of thinking, that
everything we do is designed deliberately to serve the health,
interests, rights, and needs of the people, and not violating
anybody's health, interests, rights, and needs. We've got to
be that refined.
There is no political solution 0 the American crisis.
There is no political solution; there is a constitutional
solution. But there's no political Jolution. You've got to
understand my understanding of the difference between a
political solution and a constitutional solution. There's a
constitutional solution, and we are called on in the community
to be that congregation and that community, to give
that leadership . . . .
Washington is wide open. We operated in Washington
in such a way, that all the doors are open for us. . . . Some
people had to jump in and fight agair.st the death penalty, to
keep LaRouche from being the lea�er of that-that's true.
But everybody else tonight, they'll be resting for two years.
So, what we resolve is to double o�r base. Everybody else
will be taking a two-year vacation; then we should open and
National 67

un for two years, in terms of building the kind of movement
we have to build . .. .
What I would like to do, and what I would like to propose,
is that as we went and worked in Washington against the
death penalty, we have to take some city and make it what I
call "Exhibit A." Where is the city, where organizers so
impact that city, that it incites them to change, so that everybody
says: "What the hell happened?" I propose that we
literally do that, in terms of being a catalytic agent to move
ministers, students , community organizing, into an economic
development protest. We're in a good position. All the
boys who are selling drugs, and the people who are marching
at night, saying they're victims-they do not understand that
part of marching has to go into fighting so that the Federal
Reserve is put under Congress. But that lesson needs to be
taught, in the context of taking one city and making it an
exhibit. . . .
Now, I know when you're young and you're full of energy,
you have a tendency to think you're going to live at least
10,000 years. The truth of the matter is, all of us have to
replace ourselves-tenfold. We have to replace ourselves
tenfold. So we have to pray about, think about, putting together
schools, where we seriously recruit, and then develop
a whole curriculum around what we're dealing with. There
has to be a school.
When you're bringing people out of hell, you've got to
show them a whole alternative. A whole school of thought.
So we have to have a school-and all of us need to think
about that-where we educate people in depth to fight this
war. We have to come up with hundreds of organizers in
America. In 12 years, we're going to have hundreds of young
people organizing and selling papers and selling SUbscriptions
and putting together the EIR-we've got to have that,
just in terms of impacting situations in the community as we
need.
So there are two things we need to think about: the fight
that's got to go on in Washington in terms of turning it into
Exhibit A, and the whole question of, can we build a school
which gives us the power to organize and impact on a continuous
basis all over the country?
. . . I've had a good, good time. . . . I want to thank Mr.
LaRouche for giving me another context in which to learn
about America and about our government, and what I shall
do is to take the knowledge and increase it and give it back
and give myself to solving the problem in America. It's
our nation, I love our nation, and if our nation doesn't get
straightened out, then there's not a light for the rest of the
nations and the rest of the people. So let us recognize the
awesome burden that we're under, and then let us, with
patience and love rededicate ourselves, reset our boundaries
and our objectives-short-range, medium-range, and longrange-and
let's take the Washington situation, that victory,
and build on it, and let's create the kind of mass, non-violent,
constitutional movement that the country and the world need.
68 National
Court allows ERISA
health benefits cuts
by Linda Everett
Despite appeals from the Ame�can Medical Association, the
American Hospital AssociatioQ, the American Bar Association,
the American Public Health Association, and numerous
advocacy groups including the /Michigan Protection and Advocacy
Services and Americad Association of Retired Persons,
the U.S. Supreme Court! has let stand a federal court
ruling that allows self-insured �mployers to slash health care
benefits to workers and theiriependents, even during the
course of medical treatment fo chronic, life-threatening illnesses.
On Nov. 9, in a 7-2 ecision, the court refused to
hear an appeal in the case of Greenberg v. H&H Music
Company, in which two federal courts upheld the right of a
Houston music store to cut an employee's health care benefits
from $1 million to $5,000 while he was being treated for
AIDS.
The case turns on an extremely broad-and barbaricinterpretation
of the 1974 Employee Retirement Income Security
Act (ERISA), which was meant to provide protection
to employees who rely on employer-sponsored benefits such
as pension or retirement plans. But, as this case demonstrates,
instead of assuring employee health care benefits
precisely at the point when they are needed the most, ERISA
is being wielded in a series of federal court rulings to strip
employees of any safeguards, leaving them with fewer benefit
rights than before the law w�s enacted.
In December 1987, Jack McGann, an employee of H&H
Music Company, was diagnosed with AIDS. McGann requested
reimbursement for AIDS-related medical expenses
from H&H Music's group health insurance, which, at the
time, provided up to $1 million in lifetime benefits to all
its employees. In 1988, H&H,informed its employees that,
effective Aug. 1, H&H would no longer carry group insurance,
but would become self-insured. The new policy eliminated
treatment of drug or alcohol abuse; increased premiums
and deductibles; and reduced lifetime maximum payments
for AIDS treatment from $1 million to $5,000. Under the
new plan, McGann could not recover the substantial amount
spent on his medical treatment. Not only did the new $5 ,000
cap cover his AZT treatment for only five months, but his
chronic, life-threatening illness effectively foreclosed any
possibility of purchasing alternate insurance.
Since H&H's new plan placed no similar limitation on
treatment for other diseases or conditions, McGann was ef-
EIR November 20, 1992

fectively singled out for exclusion by the policy change,
suggesting not only retaliation by H&H in response to his
filing medical claims for treatment of AIDS , but also discrimination
. As Rep. Sherwood Boehlert (R-N.Y.) told a Subcommittee
on Retirement Income and Employment hearing:
"Sounds like discrimination to me. One day you have a promised
health benefit, the next day it's removed based on the fact
you're using it." When McGann sued H&H and its former
insurer, General American Insurance Company (now acting
as administrator of H&H's self-insured plan), the court disagreed.
'Just cost-containment'
Under typical contract laws, an insurer cannot decide not
to . cover a patient just because his or her treatment is too
costly, nor can it unilaterally change the terms of its contract
to provide fewer than the orginally promised benefits. But,
under ERISA, self-insurers are not governed by state insurance
laws, so patients have no legal recourse. The U.S.
District Court judge rejected McGann's suit, saying ERISA
does not require employers to provide any particular benefits,
nor does it prohibit them from discriminating in their coverage
of different diseases. H&H, the court said, had the right
to change or terminate its medical plan at any time. Further,
the court found there was no claim of discrimination against
the then-dying McGann-because the company simply acted
for cost-containment purposes! The U.S. Court of Appeals
for the Fifth Circuit affirmed the ruling, saying ERISA does
not require different groups of participants to be treated
equally: "ERISA does not broadly prevent an employer from
'discriminating' in the creation, alteration, or termination of
employee benefit plans. "
Although McGann died on June 4, 1991, the executor of
his estate, Dr. Frank Greenberg, asked the Supreme Court
in the fall of 1991 to review the Court of Appeals' ruling.
The Supreme Court asked the advice of the Bush administration
on whether it should accept the case. Solicitor General
Kenneth W. Starr agreed with the Appeals Court, saying
there was no justification for a Supreme Court review.
The American Medical Association, among a coalition
of health and consumer groups, urged the administration to
press the Supreme Court to take up the case. In June 28
testimony before the Retirement Income and Employment
Subcommittee of the House Select Committee on Aging,
Dr. Richard Corlin, vice speaker of the AMA's House of
Delegates and a gastroenterologist from Santa Monica, California,
forcefully enunciated what was at stake if the loopholes
for abuse and discrimination under ERISA were allowed
to continue. In 1979, five years after ERISA was
enacted, only 30% of employer health plans were self-insured.
By 1983, that number jumped to nearly 51 %. Now,
with the increase in health care costs, 65% of all health plans
are self-insured. Thus, state insurance consumer protection
laws are inapplicable, leaving workers unprotected. Employ-
EIR November 20, 1992
ers, Corlin says, have "increasingly pushed the envelope to
see how far they can go in cutting or irefusing to pay certain
benefits."
Broader implications
Corlin testified that if self-insured ERISA plans are allowed
to continue to cut benefits for AIDS, they will begin
to limit benefits for other costly or long-term illnesses now
protected from discrimination, including cancer, heart disease,
Alzheimer's disease, prematuIJe and seriously ill infants,
and long-term rehabilitation and services for the handicapped.
This concern was reiteratdd by Dr. Greenberg,
associate professor of clinical molecular genetics, pediatrics,
obstetrics, and gynecology at Baylor College of Medicine in
Houston. Dr. Greenberg told the subc;:ommittee, "A diagnosis
of Huntington disease, Marfan syndrome . . . ang many
other disorders may have disastrous effect on a patient's
health insurance coverage." The overall lifetime costs of
many of these chronic disorders are l�kely to be greater than
those of AIDS. But, many families 9f "children with birth
defects, genetic disorders and/or meqtal retardation . . . are
solely dependent on their employer-supplied health coverage
for their children."
Dr. Corlin advised that self-insUred employers should
no longer enjoy corporate tax deductions in exchange for
providing employee benefits while legally avoiding their insurance
responsibilities. Reps. Willi!Qn Hughes (0-N .J .) and
Sherwood Boehlert (R-N.Y.), both members of the House
Select Committee on Aging subcommittee that oversees
ERISA, have proposed legislation that addresses "the most
egregious aspect of H&H Music-th� retroactive reduction
of benefits to employees who have relied on benefit coverage
promised by their employer." Under fH.R. 6147, to be reintroduced
in January, any changes madF to eliminate or reduce
benefits to employees, who at the tim¢ of the change were in
a course of treatment which was medit:ally necessary, would
be deemed a form of discrimination. I
In their October letter to Secretary10f Labor Lynn Martin,
Hughes and Boehlert took issue with tpe Labor Department's
recommendation to the solicitor general to deny a hearing of
the Greenberg case. The congressmejn pointed out that as a
matter of public policy, the Appeals Court decision "exacerbates
one of this country's most pressing problems." They
pointed to the 37 million people who a1re currently uninsured,
the 20 million more who are underinSured, and 63.6 million
who are sporadically uninsured due to waiting periods and
preexisting limitations. If employees � health benefits are cut
via ERISA, then Medicaid, other federal and state programs,
and local governments will have to' provide charity care .
While the congressmen correctly call for a halt to "federal
courts chiseling away at the employee! safeguards the drafters
incorporated into ERISA 18 years �go," this can only be
achieved with a national economic policy that sees each human
life as an investment in the future-not a liability .
National 69

National News
Sioux casino opposition
wins first victory
Opponents of casino gambling won an important
partial victory on Nov. 5 when the
Tribal Council of the Standing Rock Sioux
Reservation in North Dakota voted to break
its casillo contract with North Dakota attorney
and Democratic Party figure Arly Richau.
Richau's Bismarck office had been
picketed only a week earlier by a coalition
of Standing Rock members and Lyndon
LaRouche supporters, who exposed Richau
as a front man for shadowy Swiss and South
African casino interests.
"The whole purpose of the LaRouche­
Bevel campaign is to build a movement that
will win economic justice for all people,"
said LaRouche for President North Dakota
spokesman Philip Valenti. "This partial success
shows the potential power of the coalition
we're building."
While some Tribal Councilmen plan to
continue negotiations for a "better" casino
deal , opponents are looking to roll back casino
gambling on Indian reservations nationwide.
"Everyone who opposes the total organized-crime
takeover of America had better
join the fight against this casino," Valenti
declared. "Dope , Inc., the international narcotics
cartel, plans to use gambling on Indian
reservations as a lever to force legalized
casino gambling everywhere."
CAN's Kisser in libel
suit vs. 'New Federalist'
The Cult Awareness Network's executive
director, Cynthia Kisser, has apparently decided
to ignore the fact that individuals connected
to CAN's kidnaping and deprogramming
operations are about to be tried for
their crimes, and to seek to suppress revelations
about CAN's filthy activities. Papers
are finally being served against a raft of publications,
including New Federalist, in a
federal libel suit first filed by Kisser in Illinois
back in July 1992.
Kisser's civil suit claims that she has
70 National
been libeled by groups of publications,
which have "made defamatory statements
about her and . . . conspired together to give
such statements the widest possible currency."
The suit seeks a jury trial to win punitive
and compensatory damages as well as
an injunction against further spread of the
alleged libels.
The only statement Kisser alleges to be
untrue is the report that she was once a topless
dancer in an Arizona bar-an allegation
which, according to the original reporter, is
backed up by affidavit from a co-worker.
Her other allegations are that various publications
have linked her with individuals who
have records for sexual perversion, brainwashing,
and other unsavory activities. But
never does Kisser deny that the previous
president of CAN, Michael Rokos, was arrested
"for soliciting sado-masochist sex
with a male police officer posing as a
minor."
Kisser's organization also finds itself
implicated in some current criminal litigation:
the federal case against E. Newbold
Smith, Donald Moore , Galen Kelly et al.
for conspiracy to kidnap LaRouche associate
Lewis du Pont Smith. Newbold Smith
is, minimally, a member of CAN , and
Moore and Kelly have been consultants of
some sort for CAN, according to published
reports. Smith, Moore , and Kelly are to go
on trial in Alexandria, Virginia on Dec. 14.
The latest indictment charges that these
three, plus two others, began conspiring to
kidnap the young Smith at least as early as
September 1991.
Arkansas paper defends
statue's rights
Richard Allin, whose "Our Town" column
is a daily feature of Little Rock's Arkansas
Democrat Gazette, comes out in defense of
the Washington, D.C. statue ofKu Klux Klan
founder Gen. Albert Pike on Nov. 5. Under
the headline "Keep D.C. Statuesque," Allin
begins by asking, "Does Art have to be politically
correct?" He reports receiving a clipping
from Washington which covers the movement
to remove the statue and D.C. City Councilman
William Lightfoot's resolution to remove
it. Allin responds:
"Perhll-ps local experts on Gen. Albert
Pike will �tep forward to put the great man
in historical context.
"Local Masons might think it appropriate
to come forth with a brief appreciation
of his work and leadership in the masonic
movement. He was a prolific author of masonic
writings and his name is blazoned on
one of the South's masonic monuments in
Little Rock.
"His contributions as a poet are readily
available ito Arkansans and many homes
have volumes containing his verse.
"Pike was a many-sided individual with
qualities �hat are perhaps politically unacceptable
ih modem society, but whose contributions'may
be great enough to outweigh
his perceived bad side. He was a Northerner
who adopted Arkansas as his home and who
cut a wide swath locally as a rather flamboyant
fi,gure, affecting shoulder-length
hair and sometimes curious attire .
"He was a controversial general commanding
�roops in battles of the Civil War.
"Practically speaking, this might be a
bad time to remove a person so strongly
identified with Little Rock and Arkansas
from the District of Columbia. . . ."
LaRopche wins 20 %
in local S. C. race
Independent presidential candidate Lyndon
LaRouche won 20% of the votes as a writein
candic\ate for county commissioner in
Kershaw , County, South Carolina. According
hi! citizens in the county seat of Lugoff,
the LaRouche write-in campaign was
organized by a voter as a protest against the
ineptitude of the competing candidates on
the issue of water supply, which was a hot
local issue. LaRouche has made a national
name for himself for promoting large-scale
water infrastructure projects.
A local voter decided the local candidates
on the ballot were presenting unserious
solutions, and photocopied the water
policy chapter of the LaRouche-Bevel national
caJinpaign book, and distributed 500
copies in mail boxes on election eve. The
voter's cover sheet said, "If you are sick and
tired of all the nonsense about water, vote
for Lyndon LaRouche as a protest vote. "
EIR November 20, 1992

Malaysian tourists get
unwelcome treatment
"Human Rights U.S.-Style" is the title of
the Malaysian Business Times Nov. 6 lead
editorial, which reports on the detention by
the U.S. Immigration and Naturalization
Service of 24 Malaysian tourists in Boston.
The leader of the group, Choong Chee
Keong, has been charged with trying to
smuggle several of its members into the
country .
"Was the detention constitutional?"
asked the Business Times. "Has the U. S.
government the right to detain Malaysian
tourists possessing valid travel documents
without charging them with a crime? Can
the U. S. government jail innocent people so
that they can testify for or against someone
charged with a crime? The Malaysians were
also handcuffed and forced to sweat it out
for two hours in a heated courtroom in their
warm winter clothing during the hearing.
One question involves the need for handcuffs
. Where can the Malaysians run to in a
confined courtroom? What is more, a woman
detainee was interrogated and threatened
with life imprisonment if she did not confess
to coming to the U.S. to find work or to be
a prostitute. . . .
.
"If these actions do not amount to vIOlation
of human rights and human freedom,
then there must have been redefinition of
the terms without Malaysians having been
aware of it. Or, perhaps the U . S. has its own
definitions--one set for itself and another
for Third World countries? . . . So long as
the U.S. continues to think of itself as always
being in the right because of its might,
the less-developed countries will continue
to face discrimination at the hands of this
self-proclaimed 'policeman of the world. ' "
Crack gang desecrates
South Bronx church
Four separate fires were set around 4 a.m.
at Holy Cross Roman Catholic Church in
New York City's South Bronx and the
church was ransacked, according to several
EIR November 20, 1992
news reports from Nov 5. Police attribute
the action to the work of "crack" cocaine
gangs. The vandals attacked two statues of
Mary, badly breaking one, and tearing the
arm off the Christ child on the other.
Holy Cross has traditionally taken a
tough stance against the drugs that plague
this neighborhood. On Oct. 17, 300-400 of
the church's parishioners had participated in
a march against drugs. They had gone to
Randall and St. Lawrence Avenues, a
known drug marketplace, and rallied there
for 30 minutes. Flyers announcing their next
rally for Nov. 21, had been posted for two
weeks. No threats had been received by the
church prior to the attack, and none have
been received in the four and a half years
the current pastor, Rev. Michael Tyson, has
been there.
$52 million fine vs.
UMW upheld in Virginia
In a unanimous decision, the Virginia Supreme
Court on Nov . 6 upheld $52.4 million
in civil contempt fines against the United
Mine Workers imposed during the UMW's
1989 strike against Pittston Coal Company,
overturning a Virginia Court of Appeals ruling
last year. The lower court held that because
the strike involved two private parties,
and because the fines were civil penalties
sought by Pittston, the fines should be dissolved
once the strike ended. When the
strike was settled, both the UMW and Pittston
joined in asking the court to drop the
fines.
However, Russell County Circuit Judge
Donald A. McGlothlin, Jr. agreed only to
dismiss $11. 2 million in fines to be paid to
Pittston. He let stand $25 million to be paid
to the state and another $27 million in fines
to Russell and Dickenson counties, despite
the fact that both counties told McGlothlin
that they preferred seeing the strike settled
to receiving the fines.
In a statement on Nov. 11, independent
gubernatorial candidate Nancy Spannaus
said the decision "shows working people the
kind of justice they can expect from Mary
Sue Terry and her friends, if she is elected
governor in 1993 ."
Brilifly
• 'I OPPOSE RACISM' Day was
declared for Nov. 14 by Hadasha
Maryam and lamal Muhammad of
the Universal Human Rights Association
for African People, of Des
Moines, Iowa. Among other activities,
they are circulating a petition
demanding the removal of the Albert
Pike statue in Washington, D.C.
• ROBERT ; GATES has announced
he wiill retire as CIA head
in January, alt�ough there had been
some speculatiion that Gates would
stay on for a while. Three top Clinton
choices-Bobby Inman, Sen. David
Boren, and Adm. William Crowehave
declined the office.
• AN ACCUSED polluter in Cincinnati
has been sentenced to pay
dues for the next five years to the
Sierra Club after serving a year's sentence
in prison Jor illegally dumping
hazardous waste, according to Insight
magazine�
• AN ARKANSAS judge has ruled
that the Ku Klux Klan may have itself
advertised by the state in the Transportation
Department's "adopt-ahighway"
program. Officials of the
department plahned to meet on Nov.
10, to decide what to do about the
court ruling.
• 150 PEOtLE RALLIED in
Mendenhall, Mississippi on Nov. 7
to demand justice in the suspicious
death of Andre'Jones in the Simpson
County jail. He was the son of
NAACP leader Esther Jones Quinn,
and the step-son of Charles X Quinn,
a minister ofthe Nation ofisiam. His
death is the 22nd such "suicide" in
two years in Mississippi local jails.
• 'GAY' GOPER Paul Cellupica
proclaimed, "The political dawn arrives
for gays" with the incoming administration,
ill the Nov. 7 New York
Times. Homosexuals mobilized in an
"unprecedented frenzy of activity.
· . . The Human Rights Campaign
Fund, a national gay political-action
organization, estimates that more
than $3 million in gay political contributions
were channeled to the Clinton
campaign by various routes. "
National 71

Editorial
Mrs. Thatcher called the tune
In the period leading into Desert Stonn, until she was
driven out of 10 Downing Street, no voice was shriller
than that of Mrs . Maggie Thatcher (now baroness), in
demanding Iraqi blood. While there is no way in which
President Bush or the U.S. population , which rallied
enthusiastically behind him, can be exonerated for their
unjust war against Iraq-and the continuing brutal
blockade of that nation to this day-it is about time that
the British role in this genocide was duly noted.
The question is being raised in Britain today of
illegal arms sales to Iraq , but the real issue is how the
British set up the conditions in which aU .S. invasion
of Iraq might appear plausible. As early as May and
June of 1990, Lyndon LaRouche warned that there was
a British and American gameplan to foment war in
the Middle East. One clear tipoff was the worsening
economic situation , which was causing both Thatcher
and Bush to seek some diversion, coupled with Anglo­
American complicity in allowing Israel and Syria to
finalize their occupation of Lebanon.
The British, with the Americans, the French, and
the Israelis , were carrying out their typical balance-of­
power policy of fomenting war between countries in
regions which they intend to control . The revelations
coming to the surface now, in the context of the Matrix
Churchill court case, confinn EIR 's documentation of
this process throughout the 1980s. It is in this light that
the Iran-Iraq War must be viewed, as well as earlier
intervention by the United States and Britain to bring
the Ayatollah Khomeini to power. Regular readers of
this publication may be outraged by the newest revela­
tions coming from Great Britain, but they should hardly
be surprised.
Let us look at LaRouche's assessments from 1990
on . After the Gulf crisis erupted with Iraq's invasion
of Kuwait, LaRouche and EIR charged that Iraq had
been "sandbagged" into invading Kuwait, in order to
provide a pretext for the Anglo-American powers to
stage a giant international crisis. Crucial to this were
Anglo-American and Israeli efforts to "sting" Iraq , by
selling it advanced weaponry , weaponry which could
72 National
then be cited as a pretext fot why Iraq had to be at­
tacked . LaRouche charged that the "Gulf war" was not
only being used as a means o. diverting attention from
the deepening economic crisis in the Anglo-American
sphere , but of conducting sl\rrogate war against Eu­
rope , in particular Gennany ., A key actor in this was
Britain's then-Trade and Industry Secretary Nicholas
Ridley , who had launched a propaganda campaign at­
tacking Gennany as the emer , ing "Fourth Reich," and
a threat to British interests.
'
Now , 10 and behold, th� Matrix Churchill case
documents reveal that the sathe Nicholas (since made
Lord, evidently an award fo� his powers of duplicity)
Ridley was the central figurdn expediting arms sales
to Iraq ! This is amply documented by the London
Guardian (Nov. 11) and Daily Telegraph (Nov . 12),
which cite confidential government papers showing
that, just six weeks befor� the Iraqi invasion of
Kuwait, Secretary Ridley was "trying to protect arms
exports" to Iraq .
Ridley's initiatives coin4ded with another devel­
opment, which has been ignoted by the British press in
the recent retrospectives on British policy toward Iraq ,
but which was given great importance by LaRouche at
the time . This was the peculiar mid-July 1990 mission
to Baghdad by British wheelbr-and-dealer Tiny Row­
land, chainnan of the Lonrh� conglomerate and owner
of the Observer newspaper, IOstensibly to arrange the
release of a British national held in an Iraqi jail. What
Rowland was doing then was a mystery to most, since
it had been a journalist for his Observer, Farzad Bazoft,
whom the Iraqis had hanged as a spy only months
earlier. It can be sunnised, that more on the Rowland
trip will surface in the British media soon.
From a prison cell in Minnesota, LaRouche was far
smarter than his fellow Americans who allowed the
toadies of the British Crown, who were in control of
U. S. policy, to cause Americans once again to fight an
unjust war. He was able to , easily pierce the veil of
intelligence assessments which were either sadly igno­
rant or deliberately pedaling disinfonnation.
EIR November 20 , 1992

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I
Th e book that will unleash a musical revolution-
A Manual on the Rudiments of
Tuning and
Registration
BOOK I:
Introduction and
Human Singing Voice
From Tiananmen Square to Berlin, Beethoven's
Ninth Symphony was chosen as the "theme song"
of the revolution fo r human dignity, because
Beethoven's work is the highest expression of
Classical beauty. Now, fo r the first time, a Schiller
Institute team of musicians and scientists , headed
by statesman and philosopher Lyndon H.
LaRouche, J r. , presents a manual to teach the uni­
versal principles which underlie the creation of .
great works of Classical musical art.
Book I focuses on the principles of natural beauty
which any work of art must satisfy in order to be
beautiful. First and fo remost is the bel canto vocal­
ization of polyphony, sung at the "natural" or
"scientific" tuning which sets middle C at approxi­
mately 256 cycles per second. 'Copious musical
examples are drawn from the Classical musical liter­
ature to show how the natural registration of each
species of singing voice, along with natu ral tu ning,
is the composer' s indispensable "raw material" fo r
the rigorous creation of poetic ironies without which
no work of art can rightly be called "Classical."
"This Manual is an indispensable contribution to
the true history of music and a guide to the inter­
pretation of music, particularly regarding the tone
production of singers and string players alike . ...
I fully endorse this book and congratulate
Lyndon LaRouche on his initiative."
-Norbert Brainin, founder and first violitlist,
Amadeus Quartet
" . . . without any doubt an excellent initiative. It is \
particularly important to raise the question of
tuning in connection with bel canto technique,
since today's high tuning misplaces all register
shifts, and makes it very difficult for a singer to
have the sound float above the breath . ... What is
true for the voice, is also true for instruments."
-Carlo Bergotlzi
$30 plus $4.50 shipping and handling
Foreign postage:
Canada: $7.00; for each additional book add $ 1.50
Mexico: $10.00; fo r each additional book add $3.00
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Australia & New Zealand: $ 12.00; fo r each additional book add $4.00·
Other countries: $ 10.50; for each additional book add $4.50
Ben Franklin Booksellers
107 South King Street, Leesburg, VA 22075
Phone: (800) 453-4 108 or (703) 777-3661
Fax: (703) 777-8287
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4.5% sales tax.